Wednesday, October 9, 2019
Taxing Tilers
Posted By Babs De Lay on October 9, 2019, 4:00 AM
We all walk around blind to the U.S. and global trade wars, right? My friends Matt and Michele Bergman own Tile for Less, which started in Utah in 1996. It's a DYI store for contractors and home remodelers. Most of the floor and wall tile comes from China, Spain, Italy, Brazil, India and Turkey. The popular tiles these days look like postage stamps of mosaic tiles that have been glued to a mesh, so you don't have to set them individually (but it looks like you did). One of the most popular tiles in their store right now is so retro, that you could envision it on the floor of the Rio Grande Depot or Judge Building downtown. The look is traditional and was popular at the turn of the last century. A single tile sells for $5.99 per square foot (which is about 100 or more little tiles on a 12-inch-by-12-inch sheet). These are made of porcelain clay in China, which is the only country now producing these types of ceramic tiles.
Two horrific things currently are effecting the tile industry in the U.S. 1. Tariffs and 2. Countervailing, which means that China subsidizes their own tile producers to make prices competitive. As of Oct. 15, Trump is implementing a 30% tariff on these tiles. Yet, what you don't hear about is the 103% duty of countervailing that went into effect Sept. 12 on top of that 30%. A consumer who would buy a tile this summer at $5.99 per square foot will now start to see it jump to $14.13 for the Bergman's to make the same profit. Luckily, they bought a huge container of this tile long before the tariffs or countervailing went into effect. These types of taxes are 90 days retroactive and if retailers are caught hoarding, they will be slapped with massive fines as well as the tariffs and countervailing taxes.
"So many people are misinformed about these penalties and have been told that China pays for the tariffs," Michele Bergman says. "That is 100% incorrect, it's the retailer that gets charged on our bill from the freight company, collects it from us and then the freight company pays it to the U.S. government. My importer and freight company don't pay the Chinese government. I have no choice but to pass this along to our consumers. It's the buyer of tile, the regular home remodeler or contractor, who is paying the tariffs."
Stop in to talk to the Bergmans at either of their Salt Lake or Riverdale stores. (The latter moves to Layton in December.) This small business is terrified that either store could close in a heartbeat if more taxes, tariffs or duties come next year. Just wait until you hear about the 400% anti-dumping tariffs that go into effect in January. Oy vey!
About The Author
Babs De Lay
A full-time broker/owner of Urban Utah Homes and Estates, Babs De Lay serves on the Salt Lake City Historic Landmark Commission. A writer and golfer, you'll find them working as a staff guardian at the Temple at Burning Man each year.
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