The general 25% China goods tariff is challenged by 30 hard-surface-industry companies. Also: Cambria points U.S. customs officials to quartz-tariff evasion through Malaysia: there'll be no virtual trade-show floor for KBIS this year; Caesarstone expects to pick up quick from low performance in 4th-quarter 2020.
Radio Stone Update is presented on the first and third Wednesdays every month at 9 a.m. everywhere on Earth with the latest news and insights in hard surfaces. Check our archives at www.radiostoneupdate.com.
The general 25% China goods tariff is challenged by 30 hard-surface-industry companies. Also: Cambria points U.S. customs officials to quartz-tariff evasion through Malaysia: there'll be no virtual trade-show floor for KBIS this year; Caesarstone expects to pick up quick from low performance in 4th-quarter 2020.
Radio Stone Update is presented on the first and third Wednesdays every month at 9 a.m. everywhere on Earth with the latest news and insights in hard surfaces. Check our archives at www.radiostoneupdate.com.
K. SCHIPPER: Hi, I’m K. Schipper with the latest from Radio Stone Update.
00:29
Section 301 tariffs set against China by the office of the U.S. Trade Representative – the USTR – are now the subject of a massive legal action. A challenge of an omnibus 25 percent tariff on imported Chinese goods includes at least 30 companies involved in the U.S. hard-surface industry.
During the Trump administration, the USTR used tariffs as a negotiation tool. Acting under the president’s direct authority, it 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 move snowballed, with thousands of companies submitting individual suits. All allege that the USTR illegally widened the scope of its Section 301 actions by not following its own guidelines and ignoring comments from U.S. importers.
Among the well-known industry importers challenging the 301 tariff are Arizona Tile LLC; Artistic Tile Inc.; Dal-Tile Corporation; Groves Inc.; Hirsch Glass Corp.; M S International; and Universal Tile and Marble.
The individual lawsuits don’t cite specific monetary damages. However, an analysis of natural-stone imports from China by Hard-Surface Report shows a definite slowdown since the tariffs went into effect.
The federal Court of International Trade decided in early February to assign all the cases to a three-judge panel. The lawsuits are expected to give an early indication of how the Biden administration expects to handle U.S. trade policy with China, but indicators are that it’s expected to retain a firm stance.
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.
In other tariff news, the Biden administration last week suspended the so-called “Airbus” tariffs on European goods. That action, based on a long-running dispute over aircraft-production subsidies, could’ve been extended to quartz surfaces and a selection of natural stone from European Union countries and the United Kingdom. Government trade officials have four months to sort out an agreement.
02:55
Organizers of the Kitchen and Bath Industry Show – KBIS –announced that they won’t be relaunching the exhibitor experience for this year’s virtual show. Show producer Emerald was forced to close that aspect of the event that began Feb. 9, due to what were called unresolvable technical difficulties involving the servers that house the platform.
In making the announcement last week, the National Kitchen and Bath Association – which sponsors KBIS – said it had worked tirelessly to find a solution to overcome the technical points of failure on the virtual expo platform. The announcement says, “Unfortunately, our internal teams and external consultants have been unable to resolve the technical issues pertaining to the exhibitor platform in a timely manner.”
Other parts of the event, including the NKBA Voices from the Industry Conference and Design + Industry awards event were unaffected and continued as scheduled. KBIS 2022 is scheduled as an in-person event for next February 8-10 at the Orange County Convention Center in Orlando, Fla.
04:04
EMERSON SCHWARTZKOPF: This is Emerson Schwartzkopf. Federal customs officials may cite 15 U.S. companies for attempting to evade tariffs on Chinese quartz surfaces by sending them via Malaysia.
Cambria announced last week that U.S. Customs and Border Protection made a initial determination that the U.S. importers evaded the antidumping and countervailing duties levied on quartz surface products from China since June 2019.
The importers allegedly brought the Chinese quartz surfaces into the United States by transshipping, a practice where goods from one company are shipped to a second country that’s then declared the place of manufacture and origin.
Customs has seven months to continue its investigation and determine appropriate penalties.
In the enforcement of tariffs set as penalties for unfair trade, U.S. companies can ask Customs to investigate possible violations. Cambria requested the probe from Customs last October.
Said Marty Davis, Cambria president/CEO, "Cambria will continue its work to ensure free and fair trade on a level playing field for American businesses, and in doing so protecting U.S. manufacturers and their employees from illegal foreign trade. "
05:24
K. SCHIPPER: One company looking forward to a better year in 2021 is Caesarstone Ltd. Company officials made that pronouncement in expectation the world will return to more of a pre-pandemic normal. The company didn’t fully share in the second half 2020 business boom which hindered revenue performance in North America and led to a net loss in last year’s fourth quarter.
The Israeli company released its 2020 financial results in late February and reflected an unusual year that started in the middle of an overall business revamp and the shakeup of COVID-19 shutdowns. The revamp has left Caesarstone in a much stronger position, according to company CEO Yuval Dagim.
Still, the company’s net income of $7.6 million last year reflected a 40.7 percent decline from 2019. The biggest chunk of the damage came from a $4.6 million increase in finance expenses due to unfavorable foreign exchange currency rates.
Worldwide, Caesarstone’s 2020 revenues fell just under 11 percent from 2019. Revenues from North America, the company’s largest market, accounted for much of that loss. The 2020 fourth quarter in the U.S. was quite representative of the skid, dropping slightly more than 17 percent from the last three months of 2019.
Company officials blame much of the decline on lower sales at IKEA stores, where Caesarstone is a partner in countertop production. On the plus side, company officials said some of the loss was offset by better-than-expected business at U.S. Home Depot outlets. The acquisition of India-based Lioli Ceramica, a porcelain-slab manufacturer, and U.S. stone supplier Omicron Granite and Tile are expected to boost 2021 revenues.
08:29
The Granite & Marble Depot in Aurora, Ill., is installing the first countertops in its “Nominate a Hero” program, which began in the early days of the COVID-19 pandemic. The Initiative asked residents of Aurora and nearby areas to nominate a person they considered to be a hero. The company accepted any and all nominees who had been on the front lines battling the pandemic.
Nominees included first responders, teachers, grocery store workers and others. The first person to win new countertops is Larry Lasky, a front-end assistant at the Costco in St. Charles, Ill. He was nominated by his wife, Angela, who described her husband as “an essential worker with an unbelievable work ethic.” Since winning the new countertops, Angela Lasky says the couple is more positive, more revitalized and grateful for Cambria and The Granite & Marble Depot.
Tarek Merhebi, CEO and president of The Granite & Marble Depot, launched the initiative in an effort to share his positive outlook with the surrounding community, as well as multiple countertop manufacturers who were happy to supply materials for the program. Noting that the pandemic will end eventually, Merhebi says, “It’s important to stay positive, share positivity and to persevere.
In other news from around the industry….
09:57
Cosentino announces the launch of Cosentino Finance to offer streamlined and affordable financing options for residential projects up to $100,000 for qualifying homeowners. The program is being offered through its kitchen and bath dealer network and through nationally licensed finance provider Service Finance Company LLC. In conjunction with the launch of Cosentino Finance, a promotion running through March 31, will offer dealers a discounted fee on select loans from the program’s offering.
10:31
Bethany, Conn.-based LATICRETE announces the promotion of Faisal Saleem to President and COO of the LATICRETE International Division, where he will report to LATICRETE CEO Patrick Millot. In his new role, Saleem will spearhead organization development, strategic planning, leadership development, mergers and acquisitions and the expansion into new geographic locations. A native of India, Saleem worked for a LATICRETE distributor in Saudi Arabia before joining LATICRETE in 2000. Most recently, he’s served as vice president of the International division, helping the company grow to 17 operating locations worldwide.
11:15
Francisco Martinez-Cosentino, president of the Cosentino Group, is the winner of this year’s Kingdom of Spain Entrepreneurial Career Award. The award recognizes a lifetime achievement in the business world marked by job creation, innovation, internationalization and social cooperation. Since founding the company with his brothers 40 years ago, Martinez-Cosentino has guided the enterprise into an international entity with a presence in 40 countries that employs almost 5,000 people and posts an annual income of 1.1 billion euros. The award will be presented by King Felipe VI at a ceremony later this year.
11:55
Calacatta Columbus marble is the 2021 Natural Stone Institute Stone of the Year. The stone, from Brazilian producer and exporter Granitos Zucchi, will be featured on 2021 member certificates, membership code of ethics and institute marketing materials throughout the year. Calacatta Columbus is a high-density hard marble that shows great versatility to be applied on high traffic floors, countertops, walls and special design projects.
12:31
Knoxville, Tenn.-based BB Industries has announced the addition of three new salespeople to its staff. They are Cesar Rojas, who will serve the California Bay area; Randy Webb, who will cover the area between San Antonio and Austin, Texas; and Ryan Karasz, who will service Southern California and Arizona. The three recently spent a week training at the company’s Knoxville corporate offices.
12:56
Get the latest in industry news in our online newsletter, Slab and Sheet. For the latest in industry import figures, turn to Hard Surface Report at www.hardsurfacereport.com. And, for the notes on this episode and a full transcript, go to the new Radio Stone Update website at www.radiostoneupdate.com
I’m K. Schipper for Radio Stone Update and we’ll see you here again soon.