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ITC votes for duties investigation on China tires

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WASHINGTON (July 22, 2014) — The International Trade Commission voted 6-0 today to continue an antidumping and countervailing duty investigation against certain passenger and light truck tire imports from China, sending the case to its next phase.

The ITC vote came exactly one week after the U.S. Department of Commerce voted to initiate the investigation, which was instigated by petitions submitted June 3 to the ITC by the United Steelworkers union.

The next move in the case — a preliminary determination on the amount of Chinese government subsidies in the countervailing duty investigation — is due from the Commerce Department Sept. 17.

USW International President Leo W. Gerard said he was pleased by the commission vote.

“Today’s decision by the ITC to proceed on the Steelworkers’ petitions seeking relief from unfairly traded Chinese tires is critical to the thousands of workers in this industry,” Mr. Gerard said in a prepared statement.

The union previously petitioned for relief in April 2009 under Section 421 of the Trade Act, a provision designed specifically to help U.S. industries hurt by upsurges in Chinese imports.

In September 2009, the Obama administration granted relief in the form of elevated tariffs against Chinese tires — 39 percent the first year, 34 percent the second and 29 percent the third before the tariffs reverted to their previous level of 4 percent in September 2012.

“While relief was in place, billions of dollars in investments were made by firms producing tires in the United States,” said USW International Secretary-Treasurer Stan Johnson. “But China’s targeting of our industry has injured our members.”

In testimony before the ITC, the USW said Chinese tire imports skyrocketed after the Section 421 tariffs ended — to 50.8 million units in 2013 from 24.5 million in 2011. The union said it also discovered dumping margins as high as 92 percent, as well as more than 40 government subsidies, including 12 related directly to imports, available to Chinese tire makers.

Attorneys representing the China Rubber Industry Association and the China Chamber of Commerce of Metals, Minerals & Chemical Importers could not be reached for comment on the ITC vote. Neither could Roy Littlefield, executive vice president of the Tire Industry Association, which also opposes duties against Chinese tires.

Before the ITC, the attorneys for the Chinese tire makers argued that U.S. tire manufacturers do not compete directly with Chinese imports, and that recent financial statements from U.S. tire makers show no evidence of material injury from Chinese imports or anything else.

Mr. Littlefield and TIA have stated consistently that duties on Chinese tires would hurt the domestic tire industry and U.S. tire buyers, rather than helping them.

“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,” Mr. Littlefield said after the June 24 ITC hearing. “No manufacturing uptick would satisfy this product segment, but instead could create a need for product allocation, resulting in shortages and outages.”

After the Sept. 17 preliminary determination on countervailing duties, Commerce is scheduled to make its preliminary determination on dumping margins Dec. 1. Final determinations from the agency are due Dec. 1 on countervailing duties and Feb. 17, 2015 on antidumping duties.

After that, the ITC will make its final determinations Jan. 15, 2015 on countervailing duties and March 31, 2015 on antidumping duties. If the commission finds evidence of material injury, it will issue orders setting the amounts of duties one week after each final determination.

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