Published on January 9, 2014

ITC retains antidumping duties on Chinese OTR tires

Miles Moore, Senior Washington Reporter

WASHINGTON (Jan. 9, 2014) — The International Trade Commission (ITC) has voted to retain antidumping and countervailing duties on certain Chinese OTR tires in a routine review of a 2008 judgment against Chinese OTR tire manufacturers.

Meanwhile, the same Chinese companies continue to press forward with their claim that a 2012 law allowing countervailing duties to be levied against Chinese goods is unconstitutional.

Having lost before the Court of International Trade, the tire makers appealed the CIT decision Dec. 27 before the U.S. Court of Appeals for the Federal Circuit.

The United Steelworkers (USW), whose action in 2007 precipitated the original decision on duties, said ITC's ruling will "provide job security for the hundreds of tire workers who make these same tire products at Titan, Bridgestone-Firestone and Goodyear factories in Iowa, Illinois, Ohio, Kansas and New York."

The case involves certain smaller-sized OTR tires, including industrial, implement, farm/forestry, skid-steers, etc.

Long process

The case began in June 2007, when Titan Tire Corp. and the USW filed a joint petition to the ITC requesting duties against certain Chinese OTR tire imports to the U.S. Bridgestone Americas participated in the petition as a domestic interested party.

In July 2008, the Commerce Department concluded that Chinese importers were selling OTR tires in the U.S. at up to 210.48 percent less than normal value and received government subsidies ranging from 2.45 to 14 percent.

The following month, the ITC ruled that sales of Chinese OTR tires at less than fair value were causing material injury to the U.S., and both antidumping and countervailing duties were put in place.

Under the Uruguay Round Agreements Act, the ITC must conduct reviews of all antidumping and countervailing duty orders to determine if revoking them would cause the recurrence of material injury to U.S. industries.

The agency began its review of the Chinese OTR tire order Aug. 1, 2013.

At a hearing in November 2013, representatives of the Chinese tire makers failed to appear at a scheduled hearing. From then, it was only pro forma that the ITC would vote to continue the tariffs, as it did on Jan. 6.

Just before the ITC vote, on Dec. 20, Commerce made its own ruling that removing the countervailing duties against the Chinese tire makers would cause material injury against U.S. OTR tire manufacturers to recur.

Commerce found countervailable subsidies of 35.13 percent against Hebei Starbright Co. Ltd. (now owned by Trelleborg A.B.), 6.85 percent against Tianjin United Tire & Rubber International Co. Ltd., 2.52 percent against Guizhou Tire Co. Ltd. and 5.65 percent against all other manufacturers.

Strong support

The USW applauded both the ITC and Commerce decisions in a Jan. 8 statement.

"We welcome recognition that Chinese tire producers continue to benefit from unfair subsidies, and the continued relief from these subsidized imports is needed to level the playing field for the domestic tire industry and its workers," said USW International President Leo Gerard.

Crain News Service photo
<center>USW International President Leo Gerard</center>

Maurice Taylor Jr., Titan president and CEO, said the entire situation never would have happened if the U.S. had never granted China Most Favored Nation status.

"Look at China in 1992, and then look at China today," Taylor said. "(President) Clinton made China a Most Favored Nation. He should have gone to jail for it."

The Chinese tire makers have fought the duties in federal court since their inception. In September 2009, Judge Jane Restani of the CIT ruled that Commerce was guilty of "double-counting" by levying both countervailing and antidumping duties against Chinese OTR tires.

Restani reaffirmed her own verdict in August 2010 and remanded the duty decision to Commerce. In March 2011, the World Trade Organization Appellant Body also ruled that Commerce erred in levying both countervailing and antidumping duties against the Chinese.

In December 2011, the Federal Circuit appeals court ruled that the federal government did not have the authority to levy countervailing duties against goods from China and other non-market-economy countries.

In light of widespread protest against the appeals court decision, Congress passed and President Obama signed an amendment to the Tariff Act of 1930, authorizing the use of countervailing duties against goods from China and other NME countries.

Fighting back

Three companies promptly filed suit before the CIT, arguing that the new law was unconstitutional. They were Tianjin, Hebei Starbright and GPX International Tire Corp.

GPX, Hebei Starbright's former U.S. owner, was forced to file for Chapter 11 bankruptcy protection in 2009, and eventually sold most of its assets to Alliance Tire (1992) U.S.A. Ltd. MITL Acquisition Corp. purchased GPX's solid tire manufacturing business, which became Maine Industrial Tire L.L.C. Trelleborg Wheel Systems S.p.A. acquired Maine Industrial Tire at the end of 2012.

In January 2012, Judge Restani of the CIT ruled the plaintiffs did not prove their contention that the countervailing duty law violates both the Ex Post Facto Clause of the Constitution, which forbids retroactive criminalization of behaviors or activities, and the Due Process Clause of the Fifth Amendment.

Ms. Restani did find fault with Commerce's evaluation of countervailing duties, and remanded them for redetermination. On Oct. 30, 2013, after Ms. Restani had reviewed Commerce's new numbers, she approved them and sustained both the agency's actions and the new law.

Ms. Restani's final ruling gave the plaintiffs leave to appeal before the Federal Circuit appeals court. The next action in the case is expected in March.

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