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Effects of Tariffs on Building Materials


Dear Valued Customer, 
 

Since our prior letter to you a little over one month ago, there has been tremendous activity in the realm of international trade. On Monday, September 17, the Trump Administration announced an additional “Section 301” 10% ad valorem duty on a list of Chinese products with an annual trade value of $200 billion. The 10% duty will become effective September 24, 2018 and is scheduled to rise to 25% on January 1, 2019. Although we offered strong testimony to oppose Mohawk and their support of the duty on Chinese imported tile and stone products, unfortunately, ceramic and porcelain tile, glass tile, engineered quartz, and natural stone are included on the final list of Chinese products subject to this Section 301 duty. 

In addition to the 10% (soon to be 25%) ad valorem duty, we have also been awaiting the outcome of two ongoing investigations started at the request of Cambria Company LLC. Cambria seeks the imposition of Antidumping and Countervailing Duties (AD/CVD) on U.S. imports of engineered quartz surface products manufactured in China. On Monday, September 17, the Department of Commerce announced its Preliminary Determination in the CVD investigation, imposing a 34.38% duty on U.S. imports of engineered quartz surface products from China. As a result, engineered quartz surfaces imported from China will soon incur both the 10% Section 301 duty and the 34.38% CVD duty. We are still awaiting the Preliminary Determination in the Antidumping investigation, which will be published in mid-November. Accordingly, three different duties could be imposed on Chinese engineered quartz surfaces by the end of this year. As mentioned previously, we are taking action to mitigate the price increase by re-sourcing almost all of our Chinese-supplied quartz from other countries unaffected by the Cambria petition. 

At this time, we are evaluating the impact these duties will have on the cost of our flooring, countertop and decorative products. Bedrosians® will increase pricing by 10% on Tilecrest® and select decorative and stone products sourced from China, effective December 1, 2018 and possibly by 25% effective February 1, 2018 depending on whether the Section 301 duty is increased. We will continue to make best efforts to re-source products from other countries unaffected by the new duties, wherever possible, to accommodate your needs. With so much uncertainty surrounding international trade, we will keep you informed of any changes that arise in the upcoming months. 

Our goal is to continue supporting your needs by providing unique and quality materials at competitive prices. 

Thank you for your loyalty and business. We appreciate your understanding and support. Please do not hesitate to contact your local sales representative with any questions you may have. 


Sincerely, 

Larry Bedrosian
CEO 
Bedrosians® Tile & Stone