Ceramic Tile from China and the Fight Against China Imports

In just the last few months there has been an onset of trade actions brought by U.S. companies against incoming products of all kinds from China. With all the trade issues involving China and bipartisan anti-China sentiment prevalent in the United States, now is a great time to bring such actions. The international trade lawyers at my firm almost exclusively defend against antidumping and countervailing duty claims instead of bringing them. So I say this not to encourage more such actions, but as a simple statement of fact. This ceramic tile case was no surprise to U.S. trade lawyers as we had been hearing rumors it would be coming for months and I fully expect many more antidumping/countervailing duty cases will be coming down in the next few months.

If you are importing products from China, now is the time to know the trade risks of your imports.
The most recent case to drop came down last week against Chinese ceramic tile producers and exporters and the below explains more about that petition.

— The Ceramic Tile Petition and Background.

On April 10, 2019, The Coalition for Fair Trade in Ceramic Tile (Petitioner), comprised of eight U.S. producers of ceramic tile products, filed antidumping (AD) and countervailing duty (CVD) Ceramic Tiles Petition against ceramic tile products from China.

Under U.S. trade laws, a domestic industry can petition the U.S. Department of Commerce (“DOC”) and U.S. International Trade Commission (“ITC”) to investigate whether the named subject imports are being sold to the United States at less than fair value (“dumping”) or benefit from unfair government subsidies. For AD/CVD duties to be imposed, the U.S. government must determine not only that dumping or subsidization is occurring, but also that the subject imports are causing “material injury” or “threat of material injury” to the domestic industry.

Chinese ceramic tiles have already been the subject of antidumping duties by the European Union, South Korea, Mexico, India, and Pakistan. The additional AD duties in these countries likely pushed Chinese ceramic tile exports away from these markets and resulted in increased export volumes to the U.S. market. Having seen how ceramic tile producers in other countries have used antidumping duties to limit Chinese imports into their markets, U.S. ceramic tile producers are now seeking their own antidumping and countervailing duties to protect the U.S. market.

— The Scope of the Ceramic Tile Petition.

The proposed scope in the petition identifies the merchandise to be covered by this AD/CVD investigation as the following:

The merchandise covered by these investigations is ceramic tile. Ceramic tiles are articles containing a mixture of minerals including clay {generally hydrous silicates of alumina or magnesium) that are treated to develop a fired bond. The subject merchandise includes ceramic flooring tile, wall tile, paving tile, hearth tile, porcelain tile; mosaic tile, finishing tile, .and the like (hereinafter “ceramic tile”}. All ceramic tile is subject to the scope regardless of whether the tile is glazed or unglazed, regardless of size, regardless of the. water absorption coefficient by weight, regardless of the extent of vitrification, and regardless of whether or not the tile is on a backing. Ceramic tile is covered by the scope regardless or end use, size, thickness, and weight. For the avoidance of doubt, subject merchandise includes tiles pressed as very large single pieces, up to and exceeding 5′ x 15′.

Subject merchandise includes ceramic tile produced in the People’s Republic of China (PRC) that undergoes minor processing in a third country prior to importation into the United States. Similarly, subject merchandise includes ceramic tile produced in the PRC that undergoes minor processing after importation into the United States. Such minor processing includes, but is not limited to, one or more of the· following: beveling, cutting, trimming, staining, painting, polishing; finishing, or any other processing that would otherwise not remove the merchandise from the scope of the investigation if performed in the country of manufacture of the in-scope product.

The scope excludes ceramic bricks properly classified under HTSUS 6904.10.00.10 through 6904.90.00.00.
Subject merchandise is currently classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) under the following subheadings under heading 6907: 6907.21.10.05, 6907.21.10.11, 6907.21.10.51, 6907.21.20.00, 6907.21.30.00, 6907.21.40.00, 6907.21.90.11, 6907.21.90.51, 6907.22.10.05, 6907.22.10.11, 6907.22.10.51, 6907.22.20.00, 6907.22.30.00, 6907.22.40.00, 6907.22.90.11, 6907.22.90.51, 6907.23.10.05, 6907.23.10.11, 6907.23.10.51, 6907.23.20.00, 6907.23.30.00, 6907.23.40.00, 6907.23.90.11, 6907.23.90.51, 6907.30.10.05, 6907.30.10.11, 6907.30.10.51, 6907.30.20.00, 6907.30.30.00, 6907.30.40.00, 6907.30.90.11, 6907.30.90.51, 6907.40.10.05, 6907.40.10.11, 6907.40.10.51, 6907.40.20.00, 6907.40.30.00, 6907.40.40.00, 6907.40.90.11, and 6907.40.90.51. Subject merchandise may also enter under subheadings of headings 6914 and 6905; 6914.10.80.00, 6914.90.80.00, 6905.10.00.00, and 6905.90.00.50. The HTSUS subheadings are provided for convenience and customs purposes only. The written description of the scope of these investigations is dispositive.

— The Alleged Antidumping Margins on the Ceramic Tile  

Petitioner calculated estimated dumping margins for China that range from 178.22% to 428.58%.
Although Petitioner alleged numerous government subsidy programs that benefitted the Chinese wood cabinet industries, Petitioner did not allege a specific subsidy rates.

— The Ceramic Tile Exporters and Producers

Petitioner included a list of Chinese Ceramic Tile Producers and Exporters.

— The Ceramic Tile Importers.

Petitioner also included a list of Ceramic Tile Importers.

— Estimated Schedule of Investigations into the Ceramic Tile Antidumping/Countervailing Duty Claims 

April 10, 2019 – Petitions filed
April 30, 2019 – DOC initiates investigation
May 1, 2019 – ITC Staff Conference
May 24, 2019 – ITC preliminary determination
September 7, 2019 – DOC CVD preliminary determination (assuming extended deadline)
November 6, 2019 – DOC AD preliminary determination (assuming extended deadline)
March 20, 2020 – DOC final determination (extended and AD/CVD aligned)
May 4, 2020 – ITC final determination (extended)
May 11, 2020 – DOC AD/CVD orders issued (extended)