Georgia has netted another investment from a Chinese flooring firm, the third company from the country’s Jiangsu province to pledge that it will set up manufacturing in the northwestern part of the state since December.
The timing of Huali Floors’ announcement of a $27 million factory could be seen as questionable, given that U.S.-China tensions over COVID-19, Hong Kong and the lingering effects of the trade war seem poised to boil over.
The investments have also come as Georgia has pulled back on its recruitment efforts in China to focus more heavily on other less sensitive markets.
Still, the uncertainty — and a lull in the tit-for-tat tariff war brought on by the ramp-up to the so-called Phase One trade deal enacted in January — might be persuading Chinese firms not to waste an opportune moment to dive into the U.S.
The Office of the U.S. Trade Representative in November granted a temporary exclusion to a 25 percent tariff on vinyl tile flooring, a fast-growing market segment.
The Trump administration in early 2019 had raised the level from 10 percent during the third round of volleys in his trade war targeting $200 billion in Chinese imports as he sought to bring China’s technology ambitions to heel.
The exclusion lasts until August. For now, vinyl tile imports from China face the same 5.3 percent tariff as the rest of the world, though it is increasingly clear that U.S.-China economic ties are on a downward trajectory, with Mr. Trump even publicly questioning his commitment to his signature Phase One trade deal.
Since the exemption was granted, Georgia has seen a cumulative $73 million committed for vinyl plank manufacturing plants from three Chinese companies, all with ties to Jiangsu. First came a $26 million pledge from GreenView Floors International in Adairsville in December, then $30 million committed by Novalis Innovative Flooring to Dalton in February.
Huali, the latest investor, plans to hire 315 people in Murray County, bringing the promised job total for the three plants to 573.
It’s also evident that Huali, also known as Taizhou Huali New Materials Co. Ltd., will be importing a good bit of its production at least in the short term. The company has two factories in the city of Taizhou covering at least 2.6 million square feet, with about 2,000 employees. The company’s revenues stand at $360 million.
According to a news release by Gov. Brian Kemp’s office, the company’s new location will be nine miles from the Appalachian Regional Port, where shipping containers arrive after a 388-mile direct rail journey from the Port of Savannah. Opened in 2018, the inland port allows shipments to bypass road traffic, cutting costs and reducing emissions en route to the area known as the carpet capital of the world.
Huali President Philip Yuan said in the release that the “strong flooring community that the northwest Georgia area embodies was a determining factor in our commitment.”
Greg Hogan, sole commissioner of Murray County, issued a strong welcome to the company, noting that the chemistry between the community and Huali was palpable early on.
“From the first visit with Huali, there was a natural feel in the air that told me we would become home to their first U.S. facility. We welcome these wonderful people to our community and couldn’t be more proud of the work put in by the state and our local industrial development authority,” Mr. Hogan said in the release.
None of the recently announced Chinese flooring investors were named in a separate complaint filed at the U.S. International Trade Commission last year by Dalton-based Mohawk Industries Inc., which alleged patent infringement by some U.S. competitors and 20-plus Chinese firms.
Mohawk executives had reportedly lobbied the U.S. Trade Representative to maintain the tariffs on Chinese manufacturers, noting that the bulk of luxury vinyl tile imported into the U.S. is produced there and that keeping the levies would lead to more American jobs.