Stone, Quartz Surfaces from EU May Face 100% Tariff

By Emerson Schwartzkopf

WASHINGTON – A 15-year fight about worldwide aircraft sales may result in new tariffs that could effectively double the base price of European quartz surfaces and a large amount of natural-stone shipments later in 2019.

A federal interagency group will meet here next week to consider import duties on a huge list of goods from the 28 member countries of the European Union (EU), including hard surfaces with more than $480 million in customs value last year.

The Section 301 Committee will meet on May 15 at the U.S. International Trade Commission for a public hearing on possible tariffs for items as diverse as cheese, wine, books, clocks … and dimensional materials including granite and quartz surfaces.

The proposed imports duties stem from an October 2004 complaint to the World Trade Organization (WTO) by the United States against four EU members – France, Germany, Spain and the United Kingdom. The U.S., prompted by Boeing Co., claimed that the four countries, under the Airbus Industrie consortium, subsidized airliner production that went beyond levels set in the worldwide General Agreement on Tariffs and Trade (GATT).

In the decade-and-a-half since the complaint, the WTO found the U.S. claims to be valid, but compliance bogged down in a series of U.S.-EU disputes. The latest U.S. move is to set new tariffs in response to what it sees as unfair trade – the same action that’s now being taken against most goods imported from China.

The May 15 hearing will look at two sets of products for possible tariffs. One is a list limited to non-military aircraft and helicopters, along with spare parts, coming from the four Airbus-related countries.  The second is a lengthy tally of goods, coming from any EU-member country, that includes food, hard liquor, wine, books and printed goods, yarn, carpet, sweaters, swimwear, formal suits, thumbtacks, zinc alloys, screwdrivers, knives, binoculars, wall clocks – and several hard surfaces.

• Read the full USTR notice from the Federal Register

The Office of the U.S. Trade Representative (USTR) estimates the import value of all goods included on the lists at $21 billion annually. The level of new tariffs could be up to 100% of customs value.

Unlike other Section 301 tariffs proposed by the Trump administration, such as the blanket action on Chinese imports, the Airbus-related charges can’t be imposed unilaterally. The final list of affected products and the tariff rates (“the appropriate level of countermeasures,” according to the USTR) would be determined after a WTO arbitrator issues an evaluation report sometime this summer.

Dimensional hard surfaces currently being considered for tariffs include the natural-stone sectors of granite, travertine, slate and other stone, along with quartz surfaces.

If fully implemented, the proposed tariffs would target hard surfaces that accounted for $488.4 million In U.S. imports from 19 different EU countries in 2018. The brunt of the new tariff burden – 92% — would be on two countries:

Spain, with $242.4 million in 2018, including $203 million in quartz surfaces and $35.9 million in granite; and
Italy, with $207.8 million last year, including $122.5 million in granite, $41.3 million in other stone, $22 million in quartz surfaces and $21 million in travertine.

The proposed tariff list, however, curiously omitted two categories of natural stone: marble and other calcareous. Combined, the two sectors accounted for an additional $320.7 million in U.S. imports last ye

The exemption makes a major difference for some of the EU countries. The largest is Italy, with $255 million in natural stone ($226.9 million in marble, $28 million in other calcareous) not subject to a possible tariff.

Other EU countries with major natural-stone exports excluded from the proposed duties include Portugal ($16.2 million other stone, $3 million marble), Greece ($15.2 million marble, $1 million other stone) and Spain ($10.2 million marble, $5.6 million other stone).

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