China Tariffs Facing Legal Challenge
By Emerson Schwartzkopf
NEW YORK – A massive legal action contesting an omnibus 25% tariff on imported Chinese goods includes at least 30 companies involved in the U.S. hard-surface industry.
More than 3,600 lawsuits are now on file here with the U.S. Court of International Trade seeking a reversal of the Section 301 tariffs set in 2018 by the office of the U.S. Trade Representative (USTR).
The lawsuits, now being considered in bulk by a special three-judge panel, will also give an early indication of how President Joe Biden’s administration will handle trade policies implemented under former president Donald Trump.
The USTR, during the Trump administration, used tariffs as a negotiation tool in international trade disputes. The USTR, which operate under a president’s direct authority, can set tariffs in matters of trade-agreement violations or national security under a part of U.S. trade law called Section 301.
After one company filed a lawsuit against the Section 301 actions last September, the legal actions snowballed with thousands of companies submitting individual suits. All allege that the USTR illegally widened the scope of its Section 301 action from a specific set of products from China to an all-encompassing list of goods. The legal actions also contend that the USTR didn’t follow its own guidelines and ignored comments from U.S. importers.
The Court of International Trade, a separate part of the U.S. judicial system that only handles trade and customs cases, decided in early February to assign all the cases to a three-judge panel.
The current list of hard-surface-industry importers challenging the 301 tariff include:
Anatolia Tile & Stone;
Arizona Tile LLC;
Artistic Tile Inc.;
Atlas Copco Compressors;
Best Cheer Stone ;
Robert Bosch LLC;
Brastile Inc. dba Tile & Marble by Brastile;
Cosmos Granite South East LLC;
Dal-Tile Corporation;
Dwyer Marble and Stone;
Epiroc Inc.;
Everest Stone;
GBI Tile and Stone;
Golden Stones LP;
Graniti Vicentia;
Groves Inc.;
Hirsch Glass Corp.;
Husqvarna Construction Products;
Luanada Bay Tile Corp.;
M S International;
Polarstone US;
Realstone Systems LLC;
Stone Forest LLC;
Stone Source LLC;
Stone Universe Inc.;
Surface Warehouse LP;
Surfaces Southeast LLC;
Unique Stone Concepts;
Universal Tile and Marble;
Z Tile and Stone LLC.
The individual lawsuits don’t cite specific monetary damages resulting from the tariffs. However, an analysis of natural-stone imports from China by Hard-Surface Reports shows a definite slowdown since the tariffs went into effect.
In 2017, before the tariffs, China shipped $403.5 million in natural stone to the United States. Last year, under the Section 301 tariffs, natural-stone imports totaled $257.6 million for a drop of 36.2%. Some of that is due to the COVID-19 worldwide slowdown last year – but U.S. natural-stone imports from the rest of the world, during the same time, only fell by 14.5%.
The Section 301 lawsuits will also give an early indication of the Biden administration’s strategy on U.S. trade policy with China. Katherine Tai, Biden’s pick to replace Trump appointee Robert Lighthizer, signaled a firm stance as far as the current tariffs when testifying before a congressional hearing last week.
However, the issue will become more than words this month, as the three-judge panel requires an official defendants’ response from the federal government with the Section 301 lawsuits.
The Section 301 tariffs are separate from the unfair-trade tariffs imposed by the U.S. International Trade Commission in 2019 on Chinese quartz surfaces and last year on Chinese porcelain surfaces.
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