Unfair Trade Practices in Quartz Surfaces Claimed

WASHINGTON – Chinese imports of quartz-surfaces violate U.S. fair trade laws and should be assessed additional customs duties, a U.S. manufacturer alleged in an action filed here on Tuesday.

Links to portions of the filing are noted in the article.Cambria, the LeSueur, Minn.-based producer of quartz surfaces, filed a petition with the U.S. Commerce Department and U.S International Trade Commission (USITC) to “stop the unfair trading from China that is damaging our industry and to restore a level playing field,” said Marty Davis, company president/CEO, in a press statement.

If the federal government finds in favor of Cambria’s petition, temporary duties could be imposed as early as September, with final levels set in June 2019.

The petition is an independent action by Cambria, and not part of the recent tariff and duty actions initiated by the Office of the U.S. Trade Representative under the Trump administration.

The voluminous petition – 3,526 pages, including supporting documents – claims that “certain quartz surface products imported from China are being or likely to be sold at less than normal value,” violating U.S. tariff laws. (See the 112-page petition itself here.)

[Editor’s note: The petition and supporting documents will have significant areas of blank spaces. These represent data and other material deemed by Cambria to be proprietary trade information. Federal statute allows this information to be considered by the USITC and the Commerce Department but redacted from public release.]

Cambria also alleges that those imports “have materially injured the United States domestic industry producing quartz surface products and threaten to cause further material injury if remedial action is not taken,” according to the filing.

“Cambria is taking this action to ensure the long-term best interests of our industry, American manufacturing, American workers, and American business,” Davis noted in his statement. “Fair trade and free trade are inseparable paradigms; you simply cannot have one without the other. We believe strongly in free trade—to protect it, we must demand fair trade.” (See a transcript of the press release here.)

Cambria filed the petition under federal legal provisions that allow a certain percentage of U.S.-based producers of a product to take action on imports sold for less than normal value (or dumped) in the domestic marketplace. Davis, in a sworn declaration, noted that Cambria accounts for more than 50% of U.S. quartz-surface production. (See the declaration here.)

The petition claims a dumping margin, or the amount where normal value exceeds the export price, of 455.65%, based on evaluating four offers of sale of quartz surfaces from three companies: Xiamen MRD Stone Co. Ltd, Maoshuang Stone Industry Co. Ltd and Xiamen King-Stones Industry Co. Ltd.

However, actual details aren’t in the public version of this and other select documents, as federal statute allows petitioners to withhold proprietary trade information from public release. (See public version of pricing affidavit here.)

“Cambria has extensive information regarding pricing in the U.S. market through its network of sales representatives and distributors,” the petition notes. “All of these sources confirm that there has been significant price underselling of the domestic like product by subject imports.”

The petition’s supporting documents include lists, identified by Cambria, of 301 Chinese quartz-surface producers and 512 U.S. importers of Chinese quartz-surface products. (See the producer list here, and the importer list here.)

In the petition, Cambria also notes examples of lost sales and revenues due to Chinese imports. However, due to use of proprietary data, the supporting document (I-13) is “not susceptible to public summarization.”

Cambria asks that, in investigating the claims, the USITC collect pricing data in per-square-foot amounts on 2cm and 3cm slabs of white quartz surfaces with no veining or movement.

Under USITC procedures, preliminary determinations on investigations and possibly assessing additional duties must be done by June 1, with notification to the Commerce Department by June 8. A preliminary conference on the investigation will be held in Washington on May 8. (See USITC notice here.)

Imports of quartz surfaces – “agglomerated quartz slabs of the type used for countertops” – are currently allowed duty-free into U.S. ports from nearly every country worldwide. (Slabs arriving from Cuba and North Korea would get a 30% duty charged, although there’s also a general trade embargo with Cuba and no U.S. import of any North Korean goods since April 2004).

“We encourage other American companies to support fair trade, if only to protect the virtues of free trade, and in doing so, our country’s best interests.” Davis noted in the company press statement. “This is not an effort in protectionism, quite the opposite. Our efforts are to allow for open markets with free and open trade, based squarely on a market economy.”

[Editor’s Note: “And Now, A New Leader: Values shift when it comes to granite and quartz surfaces,” from the November-December issue of Stone Update Magazine is included as Exhibit I-4 of the petition. This was done as a matter of using generally available documents by Cambria and without the prior knowledge of Stone Update. The inclusion should not be acknowledged as an endorsement of the petition by Stone Update.]