Washington — The U.S. government has temporarily lifted tariffs on a big category of plastic products imported from China, luxury vinyl flooring tiles, apparently agreeing with arguments that tariffs would hurt U.S. consumers more than they'd help domestic manufacturers.
The decision was announced Nov. 7 by the Office of the U.S. Trade Representative, one of more than 30 tariff exemptions it granted that day. USTR, which granted the exemptions through August, did not officially say why it was removing LVT from the China tariffs.
Pressure for tariffs had come last year from several U.S. LVT makers, including Mohawk Industries Inc. and Congoleum Corp., which argued in government hearings that 25 percent duties on Chinese LVT would boost American manufacturing.
A Mohawk executive said imports from Asia, mostly from China, made up 55-70 percent of the U.S. LVT market. He told the August 2018 hearing that China exported $1.7 billion worth of LVT to the United States in 2017.
But importers and others contended that tariffs would depress demand and raise prices for U.S. consumers.
An industry coalition opposed to the tariffs suggested in a Nov. 12 statement that it got the tariffs lifted because it demonstrated that LVT "was not produced in adequate quantities in the United States or anywhere else outside of China," meaning that tariffs would hurt U.S. consumers.
"We are grateful that the United States Trade Representative gave due consideration to our industry and granted exclusions on several of these products," said Harlan Stone, CEO of HMTX Industries in Norwalk, Conn., and organizer of the coalition. "Over 150 companies came together, many of which are competitors, to demonstrate the unique value of these products to the overall health of the flooring industry and the construction economy as a whole."
They argued that LVT has been a "driving force" behind U.S. flooring industry growth in the last decade.
Mohawk, based in Calhoun, Ga., and Congoleum, in Mercerville, N.J., did not respond to requests for comment.
At the hearing last year, Mohawk said with tariffs, jobs and investment would "unequivocally" increase in the U.S. LVT manufacturing sector. Tariff opponents, however, countered that higher prices would mean less demand and job losses elsewhere in the U.S. economy.
The USTR announcement specified three categories of LVT removed from tariffs: a broad category of PVC tile or plank floor coverings designed to snap together and two categories of vinyl flooring tiles within certain size ranges.
One was for flooring that is 4.7-8 millimeters thick, 18-23 centimeters in width and between 120-182 cm in length, and a second category that measures 7 mm in thickness, 18-19 cm thick and between 120-125 cm in length.
The exemptions are granted retroactively to Sept. 24, 2018, when the tariffs first went in place, and will last until Aug. 7, 2020.
The tariff fight is not the only trade issue the vinyl flooring industry has before the U.S. government.
The U.S. International Trade Commission in May announced it was beginning an investigation of patent infringement claims in the vinyl flooring sector, in a case initiated by Mohawk against more than 40 industry competitors, including many from China.
Mohawk, which filed its formal complaint to U.S. authorities in March, is asking the government to block all imported products that it says infringe patents in locking mechanisms for resilient vinyl flooring mechanisms and rigid or multilayer vinyl floor panels.
The U.S. ITC investigation announcement named two companies apparently connected to HMTX Industries, along with other U.S. firms and almost 20 Chinese firms. Hearings are scheduled for mid-January.