Chinese tariffs... The rundown

Chinese Tariffs… I’m sure you have heard about them. Relations between the U.S. and China have been increasingly tense during the Trump’s administration, and tension is rising with the administration’s efforts to address a $376 BILLION trade imbalance (that’s right – BILLION. With a B.) between the nations. President Trump initially threatened a 10% tariff on all $505 billion dollars’ worth of Chinese goods entering the US if the two countries are unable to reach an agreement. Tariffs have already been applied to over $34 Billion worth of Chinese tariffs imports, with another $16 Billion scheduled.










The initial plan was to implement a 10% tariff on all imported goods, but this has since escalated to a 25% tariff.

Included on the list of products that could face these imminent tariffs? Flooring.

The  U.S. trade representative Robert Lighthizer had this to say, “For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition. Unfortunately, China has not changed its behavior-behavior that puts the future of the U.S. economy at risk. Rather than address our legitimate concerns, China has begun to retaliate against U.S. products. There is no justification for such action.”

A 25% tariff would boost the cost of a range of U.S. imports at a time when inflation has begun to pick up. It would become another factor for the Federal Reserve to consider as it decides how quickly to raise interest rates.

“This gets you nothing,” said Fred Bergsten, founder of the Peterson Institute for International Economics. “It adds to inflation pressure and interest rates and [would] strengthen the dollar, which makes trade situation even worse” for the U.S., he said.

Keith Weinberger, chief executive of Empire Today, a flooring company in Northlake, Ill., said he “might be able to offset” a 10% tariff on his purchases of Chinese vinyl flooring. “But there’s nothing you can do about 25.” (Wall Street Journal)

So… what does this mean for the flooring industry? How will Chinese Tariffs effect you? Should the tariff’s pass, we can expect to see a drastic rise in pricing from all goods imported from China, to include vinyl flooring.

Some of the major names in Flooring (Mohawk) are arguing that this will be BENEFICIAL for the US economy, arguing it will result in more domestic investment and jobs, and help them overcome a flood of imports.

“I can state unequivocally that U.S. manufacturing and jobs would increase if Chinese imports would stop flooding the market,” said Brian Carson, president of Mohawk Flooring, with 49 factories and 21,000 employees in the United States.

“Unlike many opponents [of tariffs] who do not manufacture flooring products in the United States, Mohawk has remained committed to U.S. manufacturing and technology innovations, despite tremendous pressure exerted by Chinese imports,” Carson said. “The return on these investments have been and will continue to be adversely effected if China’s unfair trade, intellectual property and industrial policies remain unrestrained.”














CONSUMER PRICE INCREASES?

Mohawks claims have met resistance from several American Importers, including Shaw Industries Group Inc. in Dalton, Ga.

Their stance is that applying a 25% duty on imports of vinyl flooring and tile will only result in a higher price for consumers, and do nothing to change China’s practices that the Trump administration is targeting.

” ChinieseTariffs on these tiles would raise housing prices disproportionately on lower to middle income Americans,” said Rupesh Shah, president of flooring importer M.S. International Inc., which employs 1,800 in the U.S.


 
 
 
 
 
 
 
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