Terrible Tariffs and What it Means for You

 

A stone usually just sits there minding its own business until someone gives it a kick, sits on it or skips into a pond.   A pretty dull existence. Like the surfacing world. Granite, granite, quartz. Like a glossy cold game of Duck Duck Goose.  Boring and comprehensible in its simplicity.

Surfacing materials are a largely unchanged industry, succumbing to their own inertia every 25 years or so.

 

ENTER THE TARIFF

 

It started with a trade war between the US and China.  Import Duties stunk up the construction market as a plethora of materials were bopped with a 10% tariff.

Then Quartz surfaces became the focal point of a Cambria filing that said China and India were dumping and subsidizing quartz surfaces.  See: Cambria’s first lawsuit against Chinese quartz.

 

Here is a primer on what these terms mean:  https://www.usitc.gov/press_room/usad.htm

The preliminary finding said, “Yup, they are subsidizing it!”, and slapped 34%-178% duties on importers of Chinese quartz.  And that was just the countervailing part.

 

Then they said, “And you are selling it for less than it costs you to make it" (anti-dumping ruling) -

 

...and all hell broke loose.  

 

Apparently, 35-45% was semi-palatable, but 300%+ was not.  A trade coalition of quartz and stone importers, along with many stone and quartz fabricators formed to combat Cambria.

 

Their argument:  Cambria caters to upper midrange and high-end market.  We serve the low-end quartz. This is hurting our market as we are losing jobs.
 

Um…. aren’t we experiencing a massive labor shortage right now?  The only ones suffering are the margins of the people that built the low-end business.  The importers that flipped specs FROM Cambria and other reputable brands to something similar they could knock off in China.  What about the solid surface, laminate AND granite jobs that were lost when you started importing and installing cheap quartz and commoditizing the market toward quartz and away from existing categories?  It is not so black and white.

 

So it is a sh*t show, and the recent hearing on May 9, 2019 was bookended by decent arguments on either side.  But it didn’t help that Cambria, two days early, had filed another petition, this time against India and Turkey saying “Hey guys, I know you are filling the gap that China left, but I am coming for you know,” sending the American Quartz Worker Trade Coalition scrambling to find a different cheap source country for quartz.

I mean, what did you expect?  Cambria has a China vendetta? Or are they protecting their business? Why stop at China? You knew this would happen.

 

Here is the fun part.  What did China do when this all happened?

They started grinding up glass and replacing the quartz filler.  But Cambria caught wind of that too and modified their language to include the glass (there had previously been a kind little carve-out for some of the Terrazzo-like glass companies)

 

What did the disgruntled importers do?  Hightailed it over to other countries like India and Turkey and started sourcing from them.  Cambria latched on to that and filed petitions against those countries as well.

 

So what’s next?

Apparently transloading in different countries and removing all traces of sourcing from China is starting to happen.  Not a new technique when it comes to tariff talk, but a shady one.

Ship to a free trade zone, remove it from one container, along with any demarcation noting country of origin and send it on its way as being from the free trade country.  Legal? Likely not, but certainly a grey area, and the quartz industry loves a gray area.

 

My head is spinning.   Quartz is confusing, unpredictable and a commodity.  Even if you specify it for a project, who knows what it will cost when it gets there.   Never mind all the talk around silicosis and potential lawsuits and lack of insurance (a whole other blog post is needed here).

 

CaraGreen products like PaperStone and Lapitec are better alternatives to quartz - more modern, more workable, higher performing and above the dogfighting.

 

As always, we will continue to follow along with the happenings of this ongoing saga. Stay tuned.

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