Massive Chinese Trade Tariffs Approved by USITC
On May 31, a ruling was issued by the United States International Trade Commission (USITC):
“On the basis of the record developed in the subject investigations, the United States International Trade Commission (“Commission”) determined that, pursuant to the Tariff Act of 1930 (“the Act”), that (the Tile) industry in the United States is materially injured by reason of imports of ceramic tile from China, provided for in heading 6907 of the Harmonized Tariff Schedule of the United States, that have been found by the U.S. Department of Commerce (“Commerce”) to be sold in the United States at less than fair value (“LTFV”), and to be subsidized by the government of China.”
Background
The Commission instituted these investigations effective April 10, 2019, following receipt of petitions filed with the Commission and Commerce by the Coalition for Fair Trade in Ceramic Tile. The final phase of the investigations was scheduled by the Commission following notification of preliminary determinations by Commerce that imports of ceramic tile from China were subsidized within the meaning of section 703(b) of the Act (19 U.S.C. 1671b(b)) and sold at LTFV within the meaning of 733(b) of the Act (19 U.S.C. 1673b(b)). Notice of the scheduling of the final phase of the Commission’s investigations and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register on December 2, 2019 (84 FR 66010).
Commerce’s affirmative final determinations concluded its antidumping duty (AD) and countervailing duty (CVD) investigations of imports of ceramic tile from China. Commerce determined that producers and/or exporters from China sold ceramic tile at less than fair value in the United States at rates ranging from 229.04 percent to 356.02 percent. The investigation also found that Chinese producers/exporters from China received countervailable subsidies at a rate of 358.81 percent.
The combined AD/CVD tariffs being assigned by Commerce are based on information provided by Chinese producers/exporters to Commerce during the investigation. For anti-dumping activities, some companies will be assessed 229.04 percent while all others will be under a 356.02 percent rate. All Chinese ceramic-tile producers/exporters will face a separate 358.81 percent subsidy rate.
Depending on rate adjustments, the combined tariffs will range between 587 percent to 714 percent.
If the ITC makes affirmative final injury determinations, Commerce will issue AD and CVD orders. If the ITC makes negative final determinations of injury, the investigations will be terminated, and no orders will be issued.
Commerce’s investigation came as the result of a petition filed last spring by the Coalition for Fair Trade in Ceramic Tile (CFTCT), a group of eight U.S. ceramic-tile producers. The CFTCT members are American Wonder Porcelain; Crossville Inc.; Dal-Tile Corp.; Del Conca USA Inc.; Florida Tile Inc.; Florim USA; Landmark Ceramics; and StonePeak Ceramics.
Foreign companies that price their products in the U.S. market below the cost of production or below prices in their home markets are subject to AD duties. Foreign companies that receive unfair subsidies from their governments, such as grants, loans, equity infusions, tax breaks, or production inputs, are subject to CVD duties aimed at directly countering those subsidies.
The findings of the Commission are contained in USITC Publication 5053 (May 2020), entitled Ceramic Tile from China: Investigation Nos. 701-TA-621 and 731-TA-1447 (Final).