WASHINGTONTire importers and retailers were guarded at the news that the U.S. Commerce Department has found preliminary evidence of the dumping of Chinese passenger and light truck tires in U.S. markets.
The Commerce Department's International Trade Administration issued a preliminary determination on Jan. 21 that Chinese tire importers were underselling the U.S. tire industry at margins ranging from 19 to 88 percent and directed importers to start paying the duties, effective Jan. 27.
The reaction of the United Steelworkers (USW) to the news, on the other hand, was no surprise as the union celebrated what it called its latest victory in its long battle over unfair trade practices.
This second decision in two months by (Commerce) confirms our belief that Chinese tire producers engage in massive unfair trade practices, said USW International President Leo W. Gerard in a Jan. 21 press release.
With Commerce's publishing of the document in the Jan. 27 Federal Register, importers of Chinese passenger and light truck tires had to begin paying antidumping duties to U.S. Customs and Border Protection, retroactive to 90 days before the publication date.
Two months earlier, on Nov. 24, Commerce found preliminary evidence of the Chinese government subsidizing production of tires for export and levied countervailing duties of 15.69 percent. In December it reduced the countervailing duty rate to 12.03 percent.
Countervailable subsidies are defined by Commerce as: Financial assistance from foreign governments that benefit the production of goods from foreign companies and are limited to specific enterprises or industries, or are contingent either upon export performance or upon the use of domestic goods over imported goods.
Dumping, according to Commerce, occurs when imported merchandise is sold in, or for export to, the U.S. at less than the normal value of merchandise.
The dumping margin is the amount by which the normal value exceeds the export price or constructed export price of the subject merchandise. The weighted-average dumping margin is the sum of the dumping margins divided by the sum of the export prices and constructed export prices, Commerce said.
The latest antidumping duties come in addition to an existing 4 percent import tariff.
Tire companies and associations generally said they were studying the Jan. 21 antidumping ruling to determine their responses.
Roy Littlefield, executive vice president of the Tire Industry Association, said TIA officials would meet with tire manufacturers, Commerce Department officials and the law firms involved in the case to formulate a game plan.
Cooper Tire & Rubber Co. said Commerce would give the firm an offset of 6.97 percent from its assessed antidumping (AD) duty of 27.72 percent, reducing the figure to 20.75 percent.
Cooper will make an assessment of the preliminary (antidumping duty's) impact on our business and will communicate with our customers as appropriate going forward, the tire maker said.
Jenner Powell, global marketing vice president of Triangle Tyre Co. Ltd., said the U.S. remains a strategic market for Triangle's globalization strategy.
As such, Triangle remains committed in the continuous development of the brand and will pursue its new product introduction program as well as product supply to the market within the context of the new AD constraints, Mr. Powell said.
TBC Corp.'s reaction was similar to Triangle's. TBC Corp. has always had a global sourcing strategy and will continue to do such, a corporate executive said. We have had and will continue to have a dynamic portfolio of North American-sourced product supplemented by sourcing from Europe and Asia.
Giti Tire (USA) Ltd. said it was disappointed in the antidumping determination. We are waiting for (Commerce) to release the full detail calculation so we can review it and understand the numbers,' the company said.
Scott Rhodes, vice president of sales-North American for Omni United U.S.A., said Omni would discuss the impact of the ruling on all stakeholders in its supply chain, including the factories and channel partners.
Omni United is committed to protecting our customers' interests, and we will do whatever we can to ensure their trust in us as partners, Mr. Rhodes said.
The USW filed petitions with the International Trade Commission in June 2014, requesting countervailing and antidumping duties against Chinese passenger and light truck tires based on Sections 701 and 731 of the Trade Act.
The USW had previously received high tariffs against Chinese tires between September 2009 and September 2012 under Section 421 of the Trade Act. Since the tariffs lapsed, the USW argued, Chinese tire exports to the U.S. had skyrocketed once again.
In the Jan. 21 Federal Register notice, Commerce said it investigated Chinese tire imports from between Oct. 1, 2013, and March 31, 2014. It found preliminary dumping margins of 19.17 percent against Giti and its subsidiaries, and of 36.26 percent against Sailun Group. Co. Ltd. and its subsidiaries.
Commerce found a 27.72-percent dumping rate against 65 companies and their subsidiaries, including Cooper, Triangle, Bridgestone Corp., Goodyear Dalian Tire Co., Hankook Tire China Co. Ltd., Pirelli Tyre Co. Ltd., Kumho Tire Co. Inc., Toyo Tire (Zhangjiagang) Co. Ltd., and dozens of tire firms based in the prime tire manufacturing areas of Qingdao and Shandong, China.
Ruling on the critical circumstances petition filed by the USW in September 2014, Commerce preliminarily determined Jan. 21 that critical circumstances existed for all companies except Giti and Sailun.
Commerce is requesting comments on this ruling, and interested parties also have 30 days counting from Jan. 27 to request a public hearing. The agency said it will make its final determination on or about June 12. If that determination is affirmative, the International Trade Commission will make its final determination of material injury by the end of July.
Racing tires, trailer tires, specialty tires, non-pneumatic tires and temporary spares are exempt from this investigation.
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