OPINION:
It’s astounding the range of U.S. industries that face predatory import competition.
If there’s a lucrative market, overseas governments and manufacturers will pull out all the stops to bankrupt their U.S. competitors. It’s an ongoing battle, and America’s quartz product manufacturers are now the latest sector to feel the heat. That’s because they’re fending off a surge of countertops and kitchen tiles made in India that are subsidized by Prime Minister Narendra Modi’s government and sold in the U.S. at well below the cost of production. It’s a clear example of “dumping” — something that’s illegal under U.S. trade law. In response, the Biden administration must enforce laws against these types of artificially and illegally underpriced imports.
In recent years, quartz surface products have become a booming home industry. In 2021 alone, the global market for engineered quartz exceeded $23 billion. And as a recent U.S. Department of Commerce investigation makes clear, a large share of that market is in the United States. Essentially, quartz producers in India are going all-out to drive America’s countertop manufacturers out of the market by evading U.S. trade laws.
In 2018, America’s quartz countertop manufacturers and employees won an important victory against Chinese dumping. Minnesota-based Cambria — a quartz surface products maker with more than 2,000 employees — had filed a trade case with the Department of Commerce. As the Commerce Department subsequently determined, Cambria had a legitimate grievance. Chinese quartz countertop manufacturers were violating long-standing U.S. trade laws by selling large volumes of quartz products in the United States at well below the cost of production.
The Commerce Department responded by imposing tariffs to offset this predatory trade. That helped America’s countertop industry start to regain domestic market share.
Since then, investments in U.S. quartz countertop production have poured in, including upward of $800 million for current and planned factories and equipment. Alongside American producers, companies from South America, Israel, Korea and Spain have also started investing in new U.S. quartz factories. The only problem is that India’s dumping of quartz products puts this investment at risk.
What’s particularly disturbing is that much of this unlawful dumping comes from some of the same producers originally targeted by the Commerce Department’s investigation in 2018.
In order to evade U.S. tariffs, some of China’s producers simply moved their quartz factories and equipment to India. And so, just as U.S. quartz producers were getting back on their feet, they’ve had to once again petition Washington for action.
Earlier this year, the Commerce Department investigated an Indian quartz manufacturer suspected of selling products at below fair-market value. After the company’s data was questioned, Commerce granted them multiple extensions to submit more data. But after further delays, Commerce imposed preliminary tariffs on the Indian company for violating U.S. trade laws.
That should be great news for U.S. quartz countertop companies. But now, the importers benefiting from this trade cheating are complaining of being treated unfairly — and want the U.S. government to halt any tariffs.
But federal import data makes clear the magnitude of the problem. In 2019 alone, quartz product imports from India rose by 700% above 2016 levels. This was clear evidence of deliberate predatory pricing to undercut U.S. companies.
In order to hold on to this advantage, lobbyists for India’s quartz industry are now trying to block the U.S. government from enforcing further tariffs — a tactic that’s causing uncertainty in the U.S. market. Companies are now reconsidering planned investments in America’s domestic quartz industry. That has led to lower production, reduced operating schedules, and declining performance throughout the U.S. quartz supply chain.
America’s quartz countertop makers are just the latest industry to face this kind of predatory competition. But President Biden can send a clear message by acting now to enforce U.S. trade laws. Defending our quartz makers would mean the administration would refuse to tolerate artificially underpriced imports in any industry and would help to ensure the nation’s industrial security.
• Michael Stumo is CEO of the Coalition for a Prosperous America. Follow him @michael_stumo.
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