Much has been made by the American press about President Trump’s unwillingness to negotiate a settlement with China over the increasingly hostile tariff dispute. China has stated it will raise tariffs on American products by $60 billion in American dollars. The claim came just one day after the Trump administration plans to increase the duties on Chinese goods by more than $200 billion,
Although the agriculture sector has received the most publicity when it comes to the economic damage the reciprocal increase in tariffs will cause, another sector could be reeling as well.
We are talking about the manufacturers of natural stone countertops.
Chinese Tariffs and Natural Stone Prices
The demand for home improvement services has skyrocketed since the beginning of 2018. However, the cost of doing business for home improvement contractors has soared as well. Part of the blame for rising home improvement project costs is the high duties imposed on Chinese natural stone products.
America’s latest tariff salvo in the war of trade with the China included around $10 billion worth of Chinese home remodeling products exclusively designed and constructed in China. According to the Trump Administration, the latest round of duties starts at 10%, with the potential of the tariffs hitting 25% by the end 2019. Reaching duties of 25% on Chinese goods by the end of the year depends on if the two countries resolve their trade differences.
Home remodeling contractor Justin Sullivan oversees home improvement projects in the greater Washington, D.C. area. He said that home remodeling costs are rising so fast that he has resorted to implementing a strategy he never thought his company would ever have to use.
“Clients and contractors are having to set contracts with escalation clauses for projects that are being scheduled for six months from now, largely because we’re not sure how far prices are going to go north,” he said. “It makes them want to do the project more quickly, trying to get it done. Then it’s looking at ways to save money that will bring down the costs so the overall budget doesn’t increase,” he said. “It puts a little bit more pressure on everyone to try and be as diligent about the costs as possible.”
The Trade War Impact on Countertops
The latest round of tariffs will also negatively impact the price for natural stone countertops, especially for marble, granite, and quartz. According to the U. S. Commerce Department, the federal government is investigating the possibility that China has flooded the American natural stone market with quartz. The Commerce Department went on to claim “that exporters received subsidies ranging from 34.38 to 178.45 percent.” As the result of the alleged dumping, the American government plans to slap an import duty on specific quartz surface products that have been valued to be worth nearly $500 million. Quartz countertops represent one of the surface materials mentioned in the Commerce Department press release.
Price of Quartz Soars
Just anticipating the duties to be imposed on China’s quartz surface products has triggered a substantial increase in the price of the material.
“I know for fact that one of my distributors stopped ordering three quartz colors because prices are jumping high enough so it’s not worth it anymore,” sales manager at Rockville, Maryland-based Stone & Tile World, Goran Zucik, said. “China was producing them by hand and no one can copy the way they were making some colors. Some of my cabinet companies want to use these colors in their remodeled showroom, but I have to tell them that these will not be available.”
However, the addition of the duties paid to export Chinese quartz benefits American quartz manufacturer Cambria, which is the company that filed the first complaint against the Chinese. President and CEO of Cambria, Marty Davis, said, “This determination is the result of the agency’s thorough investigation and confirms what the petition alleged—that China has unfairly subsidized quartz surface products to highjack the U.S. market and as a result these unfairly traded imports have flooded the U.S. market,” “This is a critical first step toward restoring a level playing field within our industry, fulfilling the obvious axiom: there is no such thing as free trade without fair trade.”
Current Price of Granite Countertops
If you are a homeowner considering installing a granite countertop, the American-Chinese trade war should cause at least a slight increase in the price of granite. As of June 2019, you can purchase a slab of granite for between $40 and $60 per square foot. For less expensive granite tile, the trade war should not trigger an increase in price, which is now at between $5 and $15 for every square foot. The average amount of money American homeowners spend on the installation of a granite countertop ranges from $2,000 to $4,500, which might increase by the end of 2019.
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