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July 14, 2015 02:00 AM

ITC votes in favor of duties on China tire imports (Update)

Miles Moore
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    By Miles Moore, Senior Washington Reporter

    WASHINGTON (July 14, 2015) — The U.S. tire manufacturing industry is suffering material injury because of passenger and light truck imports from China, the U.S. International Trade Commission (ITC) has decided in a split vote.

    ITC Vice Chairman Dean Pinkert and Commissioners Irving Williamson and Rhonda K. Schmidtlein voted in the affirmative July 14 to find material injury in the investigation, whereas Chairman Meredith Broadbent and Commissioners David S. Johanson and F. Scott Kieff voted in the negative. At the ITC, a 3-3 vote constitutes an affirmative finding.

    The ITC vote makes final the antidumping and countervailing duties levied earlier by the U.S. Department of Commerce, although those duties are retroactive to as early as Oct. 29, 2014.

    In its June 12 final determination, Commerce affirmed the following countervailing duties:

    •   20.73 percent against Cooper Kunshan Tire Co. Ltd.;
    •   37.2 percent against Giti Tire (Fujian) Co. Ltd.;
    • 100.77 percent against Shandong Yongsheng Rubber Group Co. Ltd.; and
    •   30.87 percent against all other Chinese tire manufacturers and exporters.

    In antidumping duties, the final Commerce figures were:

    • 29.97 percent against Giti Tire Global Trading Pte. Ltd., Giti Tire (USA) Ltd. and six other Giti-affiliated companies;
    • 14.35 percent against Sailun Group. Co. Ltd. and nine subsidiaries and affiliates, including Dynamic Tire Corp. and Husky Tire Corp. in Canada;
    • 25.3 percent against 65 “separate rate” companies; and
    • An 87.99-percent “China-wide” rate on all other companies.

    This represents the second victory for the United Steelworkers (USW) union in six years against Chinese tire producers and distributors. From September 2009 to September 2012, the USW won three years of high tariffs against Chinese passenger and light truck tires under Section 421 of the Trade Act, which helps U.S. industries against sharp increases in Chinese imports.

    In June 2014, the USW petitioned the ITC again for relief from Chinese imports, this time under Sections 701 and 731 of the Trade Act.

    The union asked for antidumping and countervailing duties against the Chinese, claiming that Chinese tire imports to the U.S. skyrocketed after the Section 421 tariffs lapsed.

    USW International President Leo W. Gerard issued the following statement July 14 after the ITC issued its ruling:.

    “We applaud the ITC for their decision in issuing an affirmative final determination for tariffs on Chinese tires being illegally dumped and subsidized into the U.S. market.  The outcome in the USW's pursuit of this case will not only help protect USW members and their families but also helps protect the jobs and futures of the tens of thousands of workers employed within the U.S. tire industry.   

    “This is the first case under modern dumping and countervailing duty law filed solely by the workers.  Increasingly the question of whether our trade laws are actually going to be enforced is being left to the workers, as companies and our government are either conflicted or have different priorities. The positive outcome may have resulted, in part, to recent changes in our trade laws pushed by the USW. These changes are important, but much more needs to be done to get our laws fairly and fully enforced.”

    Mr. Gerard continued that the union and its members are “sick and tired of China's approach to trade and breaking of the rules.  Its entry into the World Trade Organization has done little to stop its cheating. Time after time, we are forced to clean up the mess caused by our negotiators generating insufficient enforcement capabilities.

    “The USW brought Section 421 cases on passenger vehicle and light truck tires and convinced the (Obama) Administration to provide relief. But as soon as the relief expired, the Chinese once again swamped our markets with unfairly-priced tires. Only after significant injury was demonstrated were we able to bring a case, something our government should have already done.”

    Tire Business file photo by Bruce Meyer

    Leo Gerard, United Steelworkers

    He cited a recent editorial in Rubber & Plastics News, an Akron-based sister publication of Tire Business, which stated that “Chinese tires captured 100 percent of growth in demand between 2012 and 2014. This resulted in serious harm to domestic industry and its workers as evidenced by the direct causal relationship between surging imports from China and contraction of production in individual U.S. plants.”

    While America's economy has begun a slow recovery, Mr. Gerard said, “the benefits have not been shared. This is partially due do to the fact that our trade agreements do not adequately open up foreign markets, while doing little to stop unfair trade. While many manufacturers offshore production jobs in search of the lowest labor costs, many others who look to produce domestically find that their country's own trade agreements are not doing enough to support their efforts.

    “Trade should not be a one-way street. Until today, that street was dominated by the producers of Chinese-made, unfairly-traded tires. Now, we can begin to reclaim our market for more American-made tires and jobs.

    “This decision will make a big difference for our members. With cases pending in the steel and paper sectors, the USW will continue to fight for every job. But, it's time for our government to do its job and stop China from generating overcapacity in sector after sector. In September, when President Obama meets with Chinese President Xi, he should make this the top priority on his agenda.”

    The USW represents some 850,000 workers in North America employed in industries that include metals, rubber, chemicals, paper, oil refining and the service and public sectors.

    On July 13 the USW posted a letter by four U.S. senators, urging the ITC to make a final determination of material injury.

    “China argues that U.S. companies and workers are doing just fine,” stated the letter signed by Sens. Charles Schumer (D-N.Y.), Sherrod Brown (D-Ohio), Rob Portman (R-Ohio) and Jeff Sessions (R-Ala.). “That's like arguing a worker doesn't feel the pain when hours are reduced and pay is cut.

    “Under fair trade conditions, the U.S. industry would be doing much better and workers would be sharing in the benefits,” the senators wrote. “China's producers are clearly pursuing predatory trade practices, and these practices are causing damage to the U.S. industry.”

    Representatives of Chinese tire manufacturers could not be reached for comment. The ITC commissioners' rationale behind their votes will not be made public until July 27, when the agency transmits its final report to the Commerce Department.

    ______________________________________

    To reach this reporter: [email protected]

    Related Articles
    Commerce sets China dumping duties at 19% to 88%
    Chinese imports continued ramping up in 2014
    Commerce Dept. lowers Chinese antidumping duties
    Import duties coloring brand landscape
    USW, China firms facing off at ITC hearing (updated)
    ITC hearing paints contradictory picture of U.S. tire industry
    Commerce makes final duties rulings on Chinese tires
    USW hails Commerce decision on China tire duties
    OTHER VOICES: China tire duties will impact U.S. plants
    ITC releases final report on Chinese tires decision
    Duties final; now what?
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