Published on July 16, 2014

Commerce Dept. OKs countervailing probe on Chinese tires

WASHINGTON (July 16, 2014) — The United Steelworkers (USW) union is celebrating the U.S. Department of Commerce’s decision to initiate antidumping and countervailing duty investigations against certain passenger and light truck tire imports from China.

“The USW is pleased that the Commerce Department has completed a poll of domestic companies involved in the manufacture of passenger vehicle and light truck tires,” said USW International President Leo W. Gerard in a statement issued July 15, the same day Commerce ruled to initiate the investigations.

That poll, according to Mr. Gerard, verified the union has official legal standing to bring the antidumping and countervailing duty charges against the Chinese tire importers.

The USW petitioned the International Trade Commission (ITC) for relief June 3 under Sections 701 and 731 of the Trade Act, covering antidumping and countervailing duties.

In September 2009, the union was successful in obtaining relief under Section 421 of the Trade Act, which offers remedies to U.S. industries injured specifically by massive increases in Chinese imports. President Barack Obama approved total first-year tariffs of 39 percent against Chinese passenger and light truck tire imports. These fell gradually to 34 percent the second year and 29 percent the third, before reverting to the usual level of 4 percent in September 2012.

 Keep checking tirebusiness.com for updates to this breaking story.

 Once the Section 421 tariffs ended, Chinese tire imports skyrocketed once again, according to the union. From 24.5 million in 2011, Chinese imports more than doubled, to 50.8 million in 2013, it said.

At a hearing before the ITC on June 24, the USW also said it had found current dumping margins for Chinese tires as high as 92 percent, as well as more than 40 government subsidies available to Chinese tire makers — 12 of which are directly related to imports.

USW local presidents testified at the hearing about layoffs and production cuts at their plants that were directly related to the increase in Chinese imports.

However, attorneys for the Chinese tire makers said there was no evidence of material injury against U.S. tire manufacturers, judging from their latest balance sheets and activities. U.S. tire plants do not manufacture tires that compete directly with Chinese imports, they said.

At the time, the Tire Industry Association (TIA) issued a statement opposing antidumping and countervailing duties against Chinese tires.

“Our members, by directly importing or contracting with suppliers, are meeting the demands of a segment of the tire consumer market for lower-cost tires,” TIA said. “No manufacturing uptick would satisfy this product segment, but instead could create a need for product allocation, resulting in shortages and outages.”

Commenting on the July 15 Department of Commerce decision to pursue an investigation, Roy Littlefield, TIA’s executive vice president, said: “We oppose it, but we’re not surprised.”

The ITC is scheduled to vote July 22 on whether preliminary evidence exists of material injury against U.S. tire makers because of Chinese imports. The commission is also scheduled to transmit its findings to the Department of Commerce Aug. 1.

Commerce's International Trade Administration, in a fact sheet pertaining to the potential duties, said U.S. imports of passenger and light truck tires from China exceeded 50.8 million units last year and were valued at $2.08 billion, or slightly more than $40 per tire.

 

To reach this reporter: mmoore@crain.com.

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