U.S. Tariff Rulings on Appeal
WASHINGTON – Legal arguments continue on U.S. unfair-trade tariffs on quartz surfaces, as two cases involving U.S. Commerce Department investigations move forward here on appeal.
The appeals of separate decisions from the U.S. Court of International Trade (CIT) will be considered by the U.S. Court of Appeals for the Federal Circuit.
M S International (MSI) filed on Dec. 20 for reconsideration of a CIT ruling in October against inclusion of fabricators as producers as Commerce investigated unfair-trade claims made against India and Turkey by U.S. manufacturer Cambria Company LLC.
Meanwhile, the appeals court will hear arguments in February on an appeal from MSI and other importers concerning Commerce’s inclusion of surfaces using fine-particle crushed-glass powder in unfair-trade tariffs on quartz surfaces from China.
Both cases include Cambria and the U.S. government as defendants.
MSI’s filing this month challenges federal Judge Leo M. Gordon’s dismissal on Oct. 7 of its CIT case on how Commerce considered Cambria’s 2019 unfair-trade complaint with the U.S. International Trade Commission (USITC).
A section of the Commerce Department investigates claims made to the USITC, and also determines if there’s at least 50% support for the action from the domestic industry that may be harmed by unfair imports. Cambria’s petition to the USITC affirmed that support among 2018 U.S.-based quartz-surface manufacturers, citing itself and Trend Group. (Information on the other U.S. manufactures – Caesarstone and LG Hausys – is not revealed in public filings.)
MSI maintained that the determination of producers of quartz surfaces should include fabricators, citing that they “perform an essentially operation in the QSP (quartz-surface product) production process, increasing the value of slabs by 35-40 percent.” MSI also noted other areas where Commerce appeared to be inconsistent in its definition of producers, including in its 2018 investigation concerning Chinese quartz-surfaces.
Judge Gordon rejected all of MSI’s arguments, although part of the ruling concerning Commerce’s actions was less than a hard no.
“While this issue presents a close question, for MSI to establish that Commerce’s industry support determination was unreasonable, MSI must demonstrate that its preferred outcome was the ‘one and only reasonable’ conclusion Commerce could reach in light of the record,” the judge noted in his ruling. “MSI has failed to meet this burden.”
Filings by the U.S. government and Cambria on the appeal are still pending. No date is set for any initial consideration by the appeals court.
The appeals court, however, will hear arguments on another quartz-surface-tariff issue on Feb. 11 concerning Commerce’s inclusion of materials using fine-grain glass powder in defining quartz surfaces from China.
The appeal of a December 2020 CIT ruling on the issue is spearheaded by Bruskin International, along with MSI, Arizona Tile and Foshan Yixin Stone Company. The U.S. government and Cambria are again the defendants.
The appeal centers on Commerce’s decision, during the probe on Cambria’s petition against Chinese quartz-surface imports, to open the scope of its investigation to include materials made with crushed glass as well as quartz sands. Commerce announced the broadening in the middle of its investigation in 2019 following a request by Cambria.
Cambria argued that the substitution of glass powder for quartz is an evasion of the 300%-plus tariffs on quartz surfaces from China. The request exempted materials using larger-dimension glass, such as the recycled materials used by U.S. manufacturers Vetrazzo and IceStone.
In his 2020 ruling, Judge Gordon dismissed the complaint against Commerce’s action, noting that the plantiffs “demonstrate remarkable chutzpah in that they were somehow treated unreasonably or unfairly by a scope modification that directly addresses open and blatant evasion of antidumping and countervailing duties on quartz surface products.”
The inclusion of fine-powdered crushed-glass slabs in the tariffs is cited in a U.S. Customs and Border Protection investigation of imports by Vivaldi Commercial LLC this year.