Unclear How Dispute Will Hit Lumber Liquidators

New York, NY, April 15, 2011 -- It's not clear how the ongoing dispute concerning alleged dumping of engineered hardwood flooring will affect Lumber Liquidators, according to analyst John Baugh of Stifel Nicolaus.

The industry is awaiting a decision next month by the Department of Commerce on whether additional tariffs we be put on imported flooring from China.

Last month, many importers were hit with a countervailing duty.

The Coalition for American Hardwood Parity has also alleged that "targeted dumping" is taking place, while the Alliance for Free Choice and Jobs in Flooring, which is challenging the attempt to raise tariffs, says that move is seeking a loophole to change the way the government will determine the extent of tariffs.

"This situation remains extremely fluid and difficult to determine the eventual outcome at this point," Baugh said.

"It is worth noting that two of Lumber Liquidators largest suppliers of engineered wood flooring received a 0% and 2.5%, respectively, countervailing duty assessed in late March. These were the lowest rates placed on Chinese importers. While it is difficult to determine the direct correlation, the fact that Lumber’s received the lowest duties assessed is positive, in our view."