WASHINGTON—In a split vote—with three commissioners favoring and three opposing—the U.S. International Trade Commission (ITC) has decided that the U.S. tire manufacturing industry is suffering material injury because of passenger and light truck imports from China.
That means the anti-dumping and countervailing duties affirmed in June by the U.S. Department of Commerce went into effect July 18.
Both sides of the hotly debated issue have weighed in on the issue—and the reactions haven't really drawn many surprises. The United Steelworkers (USW) union, which sprearheaded the push for duties, was gleeful, others more guarded in their initial reactions to the ITC's vote.
“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,” said USW International President Leo W. Gerard in a statement issued July 14, the day of the ITC vote.
Cooper Tire & Rubber Co., whose Chinese operation will pay duties
under the new ruling, said it will continue to monitor the market in its continuing focus on keeping the company and its customers competitive.
“We will continue to leverage our strong global footprint, which gives Cooper the flexibility to determine the best configuration to supply high-quality, cost-competitive tires to the U.S. over the long term,” the company said in a statement.
In addition to its wholly owned Chinese facility, Cooper has low-cost production in Mexico and Serbia, as well as competitive tire production in the U.S., according to the company.
ITC Vice Chairman Dean Pinkert and Commissioners Irving Williamson and Rhonda K. Schmidtlein voted in the affirmative to find evidence of material injury to the U.S. industry as a result of Chinese imports. Chairman Meredith Broadbent and Commissioners David S. Johanson and F. Scott Kieff voted in the negative. At the ITC, a split 3-3 vote is affirmative.
The vote was not accompanied by discussion. The reasons for the commissioners' votes will appear in the final report the agency will transmit to the U.S. Department of Commerce on July 27. The ITC said it will issue the public version of that report by Aug. 24.
The ITC decision makes final the antidumping and countervailing duties levied earlier by Commerce. However, because the ITC disagreed with Commerce about the existence of critical circumstances, the retroactive application of the duties—back to Sept. 2, 2014, for countervailing duties and Oct. 29, 2014, for antidumping duties—no longer applies. U.S. Customs and Border Protection, which collected the retroactive duties, will be responsible for refunds, Commerce said.
In its June 12 final determination, the Commerce Department affirmed the final countervailing duties as:
c 20.73 percent against Cooper Kunshan Tire Co. Ltd.;
c 37.2 percent against Giti Tire (Fujian) Co. Ltd.;
c 100.77 percent against Shandong Yongsheng Rubber Group Co. Ltd.; and
c 30.87 percent against all other Chinese tire manufacturers and exporters.
In antidumping duties, the final Commerce figures were:
c 29.97 percent against Giti Tire Global Trading Pte. Ltd. and six other Giti-affiliated companies;
c 14.35 percent against Sailun Group Co. Ltd. and nine subsidiaries and affiliates, including Dynamic Tire Corp. and Husky Tire Corp. in Canada;
c 25.3 percent against 65 “separate rate” companies; and
c An 87.99-percent “China-wide” rate on all other companies.
Racing tires, specialty tires, trailer tires, non-pneumatic tires and temporary spares are exempt from the duties.
The ITC determination represents the second victory for the USW in six years against Chinese tire producers and distributors.
From September 2009 to September 2012, the union 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 injured by sharp increases in Chinese imports.
On June 3, 2014, the USW petitioned the ITC again—this time under Sections 701 and 731 of the Trade Act.
The union asked for antidumping and countervailing duties against the Chinese, claiming the Chinese tire imports to the U.S. skyrocketed literally from the very minute the Section 421 tariffs lapsed.
This increase in Chinese imports led to reduced production and job layoffs at U.S. tire production facilities, the USW argued.
Representatives of Chinese tire makers and importers claimed their tires did not affect U.S. production or jobs. They cited a U.S. tire manufacturing capacity rate of 91 percent, as well as $3.3 billion in new investment in U.S. tire manufacturing.
In his comments, the USW's Mr. Gerard noted this was the first time under modern countervailing and antidumping law that a union filed an action on its own.
“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,” he said. “The positive outcome may have resulted in part to recent changes in our trade laws pushed by the USW.”
In comments other than those by Cooper and the USW, Giti Tire Group said it had nothing to add to what it said June 12 when Commerce issued its antidumping and countervailing duty findings. At that time, Giti said it was disappointed and would formulate its course of action once the ITC had voted.
The Tire Industry Association (TIA), which opposed the Section 421 tariffs in 2009, was actually split this time around, according to TIA Executive Vice President Roy Littlefield.
Tire dealers who sell Chinese tires in the U.S. were opposed to the new duties, Mr. Littlefield told Tire Business, whereas retreaders who face stiff competition from low-cost Chinese imports favored them.
“This is a classic situation of the NTDRA vs. the ARA,” Mr. Littlefield said, referring to TIA's forerunner associations, the National Tire Dealers & Retreaders Association and the American Retreaders' Association. “The NTDRA and the ARA would have disagreed with each other.”
To reach this reporter: [email protected]