Most imported laminate flooring, engineered flooring and hardwood/ plywood had been exempt from tariffs under Section 232 of the Trade Expansion Act—a provision in U.S. law that allows the President to impose tariffs or other restrictions on imports that threaten to impair the national security of the United States. However, effective Oct. 14, the U.S. imposed separate “reciprocal tariffs” of up to 20% on those product categories, depending on the exporting country.
In a proclamation published by the Trump Administration on September 29, the President cited the results of an investigation led by the Secretary of Commerce, Howard Lutnick. Specifically, the report found that wood products are being imported into the U.S. “in such quantities and under such circumstances as to threaten to impair the national security of the United States.” Furthermore, the Secretary recommended actions under Section 232 to adjust wood product imports. The goal is to ensure these imports do not threaten U.S. national security.
In the proclamation, President Trump wrote: “The Secretary found that present quantities and circumstances of wood product imports are weakening our economy, resulting in the persistent threats of closures of wood mills and disruptions of wood product supply chains, among other things, and diminishing the utilization of production capacity of our domestic wood industry.”
Trade group backs import tariffs
Organizations like the Decorative Hardwoods Association (formerly the Hardwood Plywood Veneer Association), is encouraged by the Trump Administration’s move on hardwood imports. According to Keith Christman, DHA executive director, subsidized plywood from Asia that has been “dumped” in the U.S. market has negatively impacted U.S. manufacturing facilities and is eliminating thousands of jobs in rural communities around the country. He cited the recent closure of the Roseburg Forest Products hardwood plywood mill in Springfield, Ore., as another wake-up call that underscores the need for tariffs to prevent dumped and subsidized plywood from Asia. DHA estimates underpriced plywood from Asia represents 80% of the U.S. market.
“It’s some comfort that the reciprocal tariffs now apply to these products, but the rates are not high enough to level the playing field,” Christman said, noting that these reciprocal tariffs could go away with the upcoming Supreme Court decision. At the same time, he said an ongoing Section 232 review by the administration could lay the groundwork for additional duties on a broader range of wood products.
Suppliers chime in
Hardwood flooring suppliers who were willing to go on the record with FCNews said they prepared for what’s coming. “In anticipation of the upcoming tariffs, we’ve significantly increased our U.S. inventory levels to the point that we don’t plan to increase any prices in the near future,” said Bill Schollmeyer, vice president of sales for R&J Flooring Supply, the U.S. distribution arm for Denali Hardwood, which is produced by a family-run manufacturing operation in Vietnam. “Given the volatility and inconsistency of the various tariff policies, we’re simply going to continue with business as usual and work from our existing inventories. It’s our hope that the tariffs being considered across our entire industry would be implemented with strategic, long-term planning so that our customers—and the consumers—are not subject to constantly changing flooring prices.”
Other impacted companies include Stanton, which sources its hardwood and laminate flooring from suppliers in Southeast Asia. Tariffs ranging from 18% to 20% now hit the region, adding to an existing 8% duty. Jamann Stepp, senior vice president of hard surfaces at Stanton, said the company plans to pass a portion of the increases to its customers while absorbing some of the costs. Because Stanton focuses on the high end of the flooring market, he’s hopeful that consumers in this segment won’t resist the higher prices.
Then there’s True Touch Floors. The company produces its MonoTech engineered wood floors in China, one of the countries most impacted by the Trump Administration’s actions. Co-managing partner Josh McGrane had hoped the product’s unique construction and materials would qualify for an exemption from the new reciprocal tariffs. That was not the case, as MonoTech will see an 8% increase. However, McGrane noted that the company’s traditional hardwood flooring imports will not see a price change at this time.
Although the company issued notices to clients informing them of an impending price increase on MonoTech as a result of the latest tariffs, McGrane said the company has ample stateside inventory to help defray some of those costs. “All our distributors have plenty of inventory now, so they have a little bit of a cushion,” he said. “We’re well stocked.”
Future tariffs on wood imports
Ongoing tariff battles between China and the Trump Administration could lead to future tariffs on wood imports. The latest increases may only be the beginning as trade tensions between the two countries continue to escalate.
“It’s something that we’re watching,” McGrane said. “China is still the best for skilled labor. It’s still faster than Vietnam, China has more ports and it’s more accessible. Bottom line is they need us and we need them, so I trust our respective governments will work it out.”
The post Tariffs take effect on hardwood, laminate imports appeared first on Floor Covering News.
Tariffs take effect on hardwood, laminate imports Posted First on https://fcnews.net
No comments:
Post a Comment