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Overseas Building Materials Imports Continue to Pose Risks

Historically, building materials suppliers have experienced a range of challenges when importing finished goods building materials such as drywall, steel, flooring, etc. from China and other countries. These purchases are often made when building products demand is high in the U.S. and domestic supply is low, ultimately filling a critical gap in the construction project pipeline but opening up a host of other problems related to quality, liability and safety. For example, as our colleagues at Phillips Manufacturing pointed out in a recent blog entry, Lumber Liquidators was penalized to the tune of close to $13 million dollars for importing Chinese flooring products containing harmful chemicals. Also, during the building boom that lasted for several years leading up to 2009 and with drywall in high demand, suppliers began importing Chinese drywall. Unfortunately, the imported drywall caused health risks from excessive sulfurous gas emissions affecting hundreds of thousands of residential homes in the Southeast.

More recently, China has run into trouble with steel, as its current production capacity outpaces its own demand at home, it seeks to sell its steel abroad at unfairly low prices. As reported by the Wall Street Journal in July of 2016, the European Union (EU) recently stepped up its protection efforts by imposing new anti-dumping tariffs on Chinese and Russian cold-rolled steel imports for a period of five years. Today, in the EU, steel tariffs are as high as 21% for Chinese companies and 36% for Russian entities.

Closer to home and in May of 2016, the United States Commerce Department took action against the Chinese flood of low-cost steel and increased anti-dumping tariffs on Chinese steel products significantly by 522%.

In conclusion, the challenges resulting from questionable quality and global market volatility related to imported building materials is clearly causing U.S. manufacturers, distributors and end users alike to take pause.