You are a little late.
By JAMES R. HAGERTY
The U.S. government is preparing to decide whether to tack additional duties on wood flooring imported from China—yet another trade dispute between the countries.
But this battle has a domestic component, too, pitting American flooring distributors against one another, as manufacturer-owned companies seeking the duties face off with independent firms.
Bloomberg News Duties on Chinese flooring could push up costs for homes like this one being built in Thornton, Colo., in July.
In October, eight U.S. makers of flooring filed a petition with the Commerce Department seeking duties on Chinese-made "multilayered" wood flooring, made from veneers. The U.S. market for such goods totaled about $736 million in 2009, based on the wholesale value of imports and shipments from U.S. producers.
These U.S. firms allege the Chinese flooring is subsidized by Beijing and dumped on the market at less than fair value. Dumping generally is defined as pricing exports below what is charged in the home market.
In December, the U.S. International Trade Commission found a "reasonable indication" that the American firms were being hurt by Chinese flooring that is subsidized or sold at less than fair value.
The U.S. Commerce Department is due to make preliminary decisions this month and in May on whether to put higher duties on the Chinese products—already subject to tariffs averaging 8%—and, if so, how much to increase them. Final decisions are likely in October or November, trade lawyers say.
The U.S. firms seeking the duties include Shaw Industries, a maker of carpet and other flooring based in Dalton, Ga., and owned by Berkshire Hathaway
Inc., the investment company headed by Warren Buffett
. A Shaw spokesman said the company aims to redress trade practices "where the company is unfairly disadvantaged."
Six of the eight U.S. manufacturers seeking the duties in recent years also have imported Chinese flooring and distributed it along with their domestically made products. They imported some from China because their customers, including flooring retailers and home builders, were "requiring lower-priced flooring," said Jeffrey Levin, a lawyer representing the U.S. makers.
Other importers of Chinese flooring and some of the Chinese manufacturers have hired lawyers to fight the proposed duties.
Among them is Swiff-Train Co., a Corpus Christi, Texas, importer and wholesaler of flooring. Jonathan Train, a vice president at Swiff-Train, said flooring prices in the U.S. would rise initially if the duties are imposed. Eventually, though, he said production would shift to other countries that aren't subject to the duties, such as Indonesia and Malaysia, and U.S. manufacturers wouldn't end up with a bigger slice of their home market.
Mr. Train said the real fight is between independent U.S.-based flooring distributors such as Swiff-Train and bigger companies such as Shaw that are both manufacturers and distributors. Swiff-Train will have a harder time offering a full range of flooring if duties block imports from China, he said.
"This is not the U.S. versus China," he said. "It's U.S. companies against other U.S. companies."
Mr. Levin, the lawyer for the manufacturers, denied they are seeking to hurt independent distributors.
Also opposing the duties is Lumber Liquidators
Inc., a U.S. chain of flooring stores. The company said at a trade-commission hearing in November that certain types of Chinese flooring are among its most popular products and that U.S. manufacturers had failed to "adapt to the changing market trends."
Importers would be in a tough spot if duties were imposed, said William Perry, a lawyer representing some of them. That's because such levies can be adjusted by the federal government annually, and new duty rates are applied retroactively. As a result, importers don't know how much they would have to pay when they agree to bring in Chinese products.
On average, the trade commission found, Chinese import prices in 2009 were 28% below those on similar domestic flooring. Chinese imports accounted for 47% of the U.S. market for this type of flooring in the first nine months of 2010, up from 32% in 2007 as a whole.
China has become a frequent target for U.S. trade penalties amid charges of government subsidies or unfairly low pricing. Of 298 U.S. duties in force targeting dumping or subsidies, the Commerce Department said, 36% are on Chinese goods, ranging from steel and bedroom furniture to seafood and chemicals.