Real estate investors like luxury vinyl tile (LVT) for many reasons, but affordability and durability top the list. But if two LVT manufacturers who recently testified in Washington, D.C. get their way, the affordability aspect may disappear. Even with a price increase, some experts believe the benefits may well outweigh the costs.
According to testimony from Mohawk Industries, Inc. and Congoleum Corp. representatives, tariffs on Chinese LVT would add to job opportunities in the United States offered to workers. Brian Carson, president of Mohawk, said, “I can state unequivocally that U.S. manufacturing and jobs would increase if Chinese imports would stop flooding the market.”
Carson added that Chinese imports currently occupy between 55 percent and 70 percent of the U.S. market. Mohawk currently employs about 21,000 U.S. employees across 49 factories. He also asserted that Mohawk Industries, Inc. invested $100 million in LVT production in the United States in 2016. Carson maintained his company “has remained committed to U.S. manufacturing and technology innovations.”
According to Carson, intellectual property issues are also a factor for U.S. manufacturers competing with China.
The Other Side of the Spectrum
Critics of the proposed tariffs struck back. During the same day of hearings, flooring importer Rupesh Shah stated an argument against charging fees on Chinese imports. He stated Chinese LVT “serves the lower end of the budget-conscious market, enabling builders to offer more affordable housing solutions.”
Chinese flooring maker Jiangsu Beier of Decoration Materials took issue with claims that the company is not honoring U.S. patents. A representative of the company stated that “Chinese manufacturers respect U.S. intellectual property right by paying patent [royalties] in the amount of 5-12 percent of sales price, significantly higher than what is paid by the U.S. and EU manufacturers.”
Congoleum President and CEO Chris O’Connor called the tariffs debate “a complex issue for the industry.” He added his company imports vinyl flooring products from China, yet still supports the tariffs. Congoleum made industry headlines earlier this summer when it announced 3-5 percent price increases across several categories of its flooring products. The price increases were due to “significant increases across virtually every aspect of our operations,” including “key raw materials…higher energy, labor, and transportation costs.”