Quartz-Surface Inquiry: Is it from China or Malaysia?

By Emerson Schwartzkopf

WASHINGTON— Quartz-surface imports from Malaysia to the United States will come under close scrutiny under a new investigation from the U.S. Commerce Department concerning evasion of unfair-trade tariffs.

The federal agency’s International Trade Administration (ITA) announced Feb. 2 that it would investigate whether Malaysian exporters are claiming that quartz-surface products made in Malaysia are, in fact, manufactured in China.

“Commerce will examine whether quartz surface products or quartz surface product inputs from China are exported to Malaysia for minor processing and then exported to the United States,” noted an ITA news release.

The ITA action – officially “scope and circumvention inquiries” – will determine if Chinese quartz-surface products are shipped to Malaysia, undergo some fabrication, and then exported to the United States with Malaysia as the country of origin. The process, called transshipping, would circumvent the 300-percent-plus unfair trade tariffs put on Chinese-made quartz surfaces in 2019.

Preliminary evidence collected by the ITA shows that, before Cambria Company LLC made its compliant in May 2018 about Chinese quartz surfaces, Malaysia never exported the material to the United States. By the end of 2020, roughly two-and-a-half years after Cambria’s initial action, Malaysia shipped $116.1 million of quartz surfaces to the U.S.

In that same time frames, the ITA’s initial inquiry showed that Malaysian imports of quartz-surface-product “inputs,” such as slabs, went from $13.9 million before June 2018 to $104 million in the following two-and-a-half years.

Other parts of the ITA’s initial inquiry point to Chinese connections with Malaysian exporters. However, none of the information made public by the ITA shows an actual violation of the unfair-trade tariffs.

Unlike previous unfair-trade claims made against foreign quartz-surface producers, the Commerce Department itself is launching the inquiry. It’s the first time the department started the process on such an investigation under new federal rules effective last November.

The Commerce Department will accept comments and “factual information” on the scope of the inquiry from interested parties concerning the inquiry through March 2 and allow clarifications and corrections through March 16. If the department decides to go ahead with a full inquiry, it will issue a final scope ruling by June 2; and a final determination on tariff circumvention by Nov. 29.

Quartz-surface shipments from Malaysia that would fall within the scope of the ITA inquiry may be subject to the unfair-trade tariff. Imports that aren’t finalized, or liquidated, by U.S. Customs and Border Protection will remain open, and Customs is also authorized to collect deposits equal to the unfair-trade tariffs for incoming shipments and, with some specific exceptions, materials not yet removed from ports-of-entry