Cambria Anti-Dumping Claims Against the China Quartz Suppliers
Last month, an action by Cambria was initiated against the China Quartz suppliers and fabricators in an anti-dumping action. Cambria was for many years the sole exclusive producer in the US for quartz that was made on the Italian Breton technology. They asked the USITC, U. S. International Trade Commission, for relief against Chinese manufacturers of quartz, accusing them of “dumping” or being subsidized by the Chinese government.
This matter before the trade commission could have a serious impact on the cost of quartz material.
I believe some of our politicians might call the article shown below as “fake news.” You may have received a copy of this recently, which we suspect was initiated by Cambria and might have likely been involved in the distribution of this document. This article, while appearing to be a “newsworthy” does not appear to have come from the conventional media.
While this is a pretty good “spin” on the case, it is not really rooted in accuracy. It is my opinion that the nature of this article was not to report the case findings but to intimidate the market into thinking that the decisions have been made in this case, which they most clearly have not been made, to this point.
I think the more telling comment – not included in this release may be from Cambria’s President, Marty Davis, who mentioned in the initial hearing that from the early 2000s to 2016 Cambria was able to increase prices every year until 2017. I think that this statement is quite telling and clearly explains that the company had a near monopoly on the product, given that Cambria held the exclusive license to the Breton technology until recently.
At least three other companies have begun manufacturing quartz slabs in the US since Cambria’s license expired. Competition from many sources, not just Chinese manufacturers, has impacted Cambria’s profitability. It is notable that none of the other US manufacturers of quartz slabs has joined the action.
WASHINGTON – Imports of Chinese quartz-surface products will be subject to punitive duties later this year as part of a federal panel’s decision on unfair international trade practices.
U.S. International Trade Commission (USITC) voted 5-0 yesterday that U.S.-based manufacturers of quartz-surface products are “materially injured” by-products from China “that are allegedly subsidized and sold in the United States at less than fair value.”
The U.S. Commerce Department, after official notification today from the USITC, will continue investigations, with decisions on import-duty amounts in July and September.
The USITC decision comes after an April complaint filed by U.S. quartz-surface manufacturer Cambria Company LLC that claimed below-market sales of Chinese-made material made possible by subsidies by various government agencies and programs in China.
USITC Chairman Rhonda K. Schmidtlein, Vice Chairman David S. Johanson, and commissioners Irving A. Williamson, Meredith M. Broadbent and Jason E. Kearns voted for the action.
“We are encouraged by the actions taken thus far by both the Department of Commerce and the ITC to stop this unfair trading and restore a level playing field where we can compete fairly in a free market economy,” said Marty Davis, Cambria president/CEO, in a media statement. “The unfairly traded Chinese imports have disrupted healthy competition and threaten to gravely injure the quartz surfaces product industry at all levels of trade in the U.S.”
With its vote, the USITC rejected testimony from several U.S. quartz-surface importers, including Arizona Tile and M S International, that the Chinese surfaces didn’t harm Cambria’s market position as a seller of premium-priced products, and that U.S. surface fabricators should be considered as part of the domestic manufacturing base.
The commission also rejected an argument by several importers that Cambria’s request reached beyond its own product base of slabs to include Chinese quartz-surface goods such as blanks and fabricated parts for onsite U.S. installation.
The USITC’s factual highlights in its decision notes:
Quartz surface products consist of slabs and other surfaces created from a mixture of materials that includes silica predominately (e.g., quartz, quartz powder, cristobalite) as well as a resin binder (e.g., an unsaturated polyester). The incorporation of other materials, including, but not limited to, pigments, cement, or other additives does not remove the merchandise from the scope of the investigations.
The highlights also offer a broad definition of product types facing import duties:
In addition to slabs, the scope of these investigations includes, but is not limited to, other surfaces such as countertops, backsplashes, vanity tops, bar tops, worktops, tabletops, flooring, wall facing, shower surrounds, fireplace surrounds, mantels, and tiles. Quartz surface products are covered by these investigations whether or not polished, cut, fabricated, cured, edged, finished, thermal-formed, packaged, and regardless of the type of surface finish.
The factual highlights also noted that there are three U.S. producers of quartz-surface materials; while the document doesn’t name them, Cambria’s petition noted Caesarstone’s plant in Richmond Hill, Ga., and LG Hausys America’s facility in Adairsville, Ga.
Neither Caesarstone or LG Hausys joined Cambria in action. In early May, Caesarstone interim CEO Yair Averbuch told Wall Street analysts that he preferred not to cite any specific cases, but that “we support first-rate practices in our markets.
“More specifically, this petition was not initiated or submitted by us,” he said. “However, of course, if regulatory agencies will approach us, we will provide any relevant information.”
The USITC’s highlights noted producer plants in five states — California, Georgia, Indiana, Minnesota, and Ohio – but offered no details on specific locations.
The Commerce Department will now determine two separate duties. Investigation of the first – countervailing (or anti-subsidy) duties – has a tentative July 11 deadline. The second “antidumping” duty should be determined by Sept. 24.
The USITC’s full report on the action — Quartz Surface Products from China, Inv. Nos. 701-TA-606 and 731-TA-1416 (Preliminary), USITC Publication 4794 — will be available to the public after June 29.
The USITC decision is not part of the ongoing tariff and duty actions on Chinese goods initiated by the Office of the U.S. Trade Representative under the Trump administration.
Cambria Anti-Dumping Claims Against the China Quartz Suppliers – Part II
The following comments are our comments, written by counsel, regarding the original Cambria Anti-Dumping article provided at the end of this article.
The article in question draws a number of unsupported conclusions, and in many ways reads like a press release of the domestic industry to try to “convince” the importers, distributors, and customers, that the U.S. government has “rejected” all opposition and that the imposition of an order is a fait accompli.
As you may recall, the injury standard for preliminary determinations is very slight. That the ITC made an affirmative determination does not mean that the argument was “rejected”. Quite to the contrary, the purpose of participation in the ITC preliminary was to set up all of the arguments for the final determination. As we noted during our meetings, the ITC’s preliminary views on the arguments, which is more important than the vote, have not yet been released.
With regard to the “scope of the base” and whether the Commission rejected attempts to reduce the scope and confirmed the broad scope, the article is confused. The scope of the case is set by the petitioner and, to the extent that it is modified, this is done at the Department of Commerce. As you know, the scope process is still going on at the Department and the language has not changed at all.
The quoted language covering the over-broad operations is taken directly from the initiation and was neither approved nor rejected by the ITC. At the ITC we were not challenging scope – that is to say the coverage of the case – we were challenging like product.
Our argument is that while Cambria might be able to include this product within the scope of the order, we were dealing with the product of two different industries and thus injury needed to be examined separately and as Cambria was not hurt, in any way, by the fully pre-fabricated product, we have no injury for this segment. this is not the same as scope, and to the extent that it will be addressed in any fashion in the preliminary determination, it will be addressed in the opinions of the Commissioners. These opinions have not yet been released.
With regard to the dates, the July and September dates are the unexpended dates for the preliminary determinations. As the Department has not yet selected mandatory respondents in the countervailing duty matter, it seems a virtual certainty that the preliminary determination will be extended until Mid-September.
Furthermore, if the respondents cooperate, and in this case, it appears that they will cooperate, it would be highly unusual if the Antidumping Duty preliminary determination was not extended. The list of the earliest dates, again with the suggestion that they are the likely dates, again appears intended to create panic among importers, distributors, and their customers.
I hope this helps explain things. The impact to our nation’s hoteliers if this action by Cambria, not the US domestic suppliers, but Cambria on its own, will be significant. Please contact your Congressperson and let them know your team’s opposition to this unneeded and unfair case.