India Quartz-Surface Tariffs Raised Beyond 80% Level

WASHINGTON – An apparent U.S. government goof over calculating a subsidy for one quartz-surface producer in India is leading to a steep rise in preliminary tariffs for almost all quartz manufacturers from that country.

The countervailing, or subsidy-related, tariff on nearly all Indian quartz surfaces will climb from 4.32% to 83.79% this week after appearing in the Federal Register, the U.S. governments publication of record.

However, the increase won’t apply to material imported from July-October that’s under consideration for retroactive tariffs.

The hike comes after the U.S. International Trade Administration (USITA) announced late last week that it made a mistake in determining subsidies for land leased by Pokarna Engineered Stone Ltd. in a special economic zone from an Indian government entity.

The USITA, part of the Commerce Department set the 4.32% preliminary tariff on Oct. 11 as part of its investigation of an unfair trade petition by Cambria Company LLC concerning Indian quartz-surface imports.

Cambria sent a letter of comment on Oct. 16, claiming that federal investigators undervalued the benefit of the leased government land in a ministerial error – defined under federal law as an error in calculation, copying or other unintentional acts considered by the Secretary of Commerce as “ministerial.”

On Nov. 13, the USITA agreed with Cambria, noting that the Commerce Department “inadvertently measured” the leased-land benefit “by comparing the average monthly per-acre value of the land benchmark to Pokarna’s monthly payment for the entire acreage of leased land, resulting in an understated subsidy rate.” The correction raised Pokarna’s rate under that particular subsidy from 1.9% to 81.31%.

In its decision last week, the USITA also rejected rebuttals on Cambria’s ministerial-error claim made in late October by Pokarna and the Federation of Quartz Surface Industry, India. Both the company and the quartz-surface-producer group argued that refiguring the subsidy would be a change in methodology and surpass any correction of ministerial errors.

However, in classifying the changes as ministerial, the USITA noted federal law that disregards any replies on claims made concerning a preliminary determination — the initial action taken on Oct. 11.

“While we have determined to retain these submissions on the record of the investigation, in accordance with 19 CFR 3510224(c)(3), we have not considered these comments for purposes of this decision memorandum,” wrote James Maeder, deputy assistant secretary for antidumping and countervailing duty operations at Commerce.

However, the USITA announced it will continue to review additional information from Pokarna concerning purchases of land like the property leased by the company. The data arrived too late to be considered as part of the preliminary tariff decision.

A slight adjustment in benefits accrued by Pokarna on duty-free imports of capital goods raised the total rate for Pokarna from 4.32% to 83.79%.

The USITA chose to study two quartz-surface exporters in its investigation of Cambria’s unfair-trade claim. Because the other company queried in the probe – Antique Marbonite – only had a de minimus, or minimal, tariff declared in October, the USITA applied the amended preliminary duty of 83.79% to all other quartz-surface imports from India.

“We appreciate the Department of Commerce’s continued diligence to enforce existing trade laws to protect U.S. businesses from unfair competition resulting from unfair subsidies to foreign companies by their governments,” said Rebecca Shult, executive vice president, general counsel at Cambria. 

“We will continue to stand up for U.S. businesses, our 2,000 employees, and our many fabrication customers,” Shult added. “Free trade demands fair trade.”

The new rate won’t affect Indian quartz-surface imports possible affected by the USITA’s declaration of critical circumstances that could lead to retroactive tariffs. The new rate will only apply to material received in the United States after this week’s Federal Register notice. Products coming to this country from July 7 to Oct. 11 – the period of possible retroactive tariffs – would be subject only to the original 4.32% duty.

The U.S. International Trade Commission (USITC) would be the final arbiter in determining critical circumstances. The commission rejected retroactive tariffs earlier this year in its decision on Chinese quartz-surface tariffs.

The USITA’s actions last week only apply to countervailing tariff rates from India. Similar tariffs for quartz products from Turkey – the target of a separate unfair trade complaint from Cambria – remain at 3.81%.

A decision on antidumping rates for selling below market value on both Indian and Turkish quartz-surface products is expected from the USITA during the first week of December.

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