China still #1 in car tire imports despite huge drop

WASHINGTON (Aug. 17, 2015) — At first glance, trade statistics for the first six months of 2015 appear to show that the imposition of import duties on Chinese consumer tires achieved to a great extent what the action's petitioner envisaged — imports from China were essentially cut in half from the first half of 2014.

Overall, however, imports were up slightly vs. 2014 as tire producers in other Asia nations — South Korea, Thailand, Indonesia, Taiwan, Philippines, Vietnam, etc. — stepped in and filled the nearly 12-million-tire void created by the Chinese cutback.

• This article appears in the Aug. 17 print edition of Tire Business.

It also appears the negative effect on Chinese imports has bottomed out. The rate of decline has eased progressively month by month throughout the first half of 2015, starting at 74 percent down in January to just 35 percent in June.

As such, it appears the import share of the U.S. aftermarket will remain essentially unchanged, based on the Rubber Manufacturers Association's (RMA) recently released mid-year shipments forecast, which calls for replacement passenger tire shipments to grow just 0.1 percent and light truck tire shipments to fall 0.2 percent.

The effect on U.S. production, a key element of the United Steelworkers (USW) union's premise in filing the petition for relief from imports, is as yet unknown.

The USW, claiming Chinese passenger and light truck tires were damaging the U.S. tire industry, petitioned the U.S. government in June 2014 to impose import duties. The U.S. International Trade Commission, after 14 months of investigation, confirmed the dumping action July 14, putting into force antidumping and countervailing duties on China tires that the government has established.

The combined duties range from 45.22 percent to more than 120 percent, depending on manufacturer.

Imports of passenger tires from China were off 49.6 percent in the January-June period to 12.4 million units, according to U.S. Department of Commerce data.

It should be noted, however, that despite the precipitous decline, China is still the No. 1 source of imported passenger tires in the U.S., accounting for one in six tires imported.

At the same time, the average declared value of a Chinese passenger fell 5.7 percent to $33.77. Among the top 25 exporters of tires to the U.S., only Vietnam had a lower declared value at $32.83.

The average value overall of an imported passenger tire rose slightly to $52.56, the data show.

In addition, though, more than a dozen other countries increased their exports to the U.S. by double digits, including Canada and Mexico. But the landscape was dominated by Asian countries — South Korea up 33.1 percent, Thailand up 35 percent, Indonesia up 25.2 percent, Taiwan up 16.8 percent, Philippines up 50.7 percent and Vietnam, up nearly sevenfold.

Imports from Canada — from the Canadian affiliates of U.S. tire makers Bridgestone Americas, Goodyear and Michelin North America Inc. — jumped 21.2 percent, while Mexico's exports to the U.S. increased 10.3 percent.

In the light truck tire sector, imports from China fell 58.2 percent, dropping it behind South Korea and Japan in the list. Overall imports were off as well, falling 17.7 percent shy of the 2014 first-half total, with Canada — the No. 1 “offshore” source for imported light truck tires — down 36.6 percent as well.

The average declared value of a light truck tire from China was $64.75, up about $3 from a year ago.

On the medium truck/bus tire side, Chinese tire makers continued to make inroads on the U.S. marketplace, increasing their shipments to the U.S. 17.2 percent in the six-month period to account for 62 percent of all imports.

It's worth noting that, besides the U.S., there's only one other serious action being taken to restrict Chinese tires: an anti-dumping investigation by the Customs Union of Belarus, Kazakhstan and Russia.

A survey of other major countries shows a range of import restrictions.

Mexico, according to the Camara Nacional de la Industria Hulera (CNIH)—that country's tire manufacturers association—imposes a 15-percent import duty for passenger, light truck and medium-heavy-duty truck tires on countries that have not signed a commercial agreement with Mexico, including China, Taiwan, Korea, Venezuela, India, Vietnam and Malaysia.

The industry contemplated at the beginning of this year starting an anti-dumping process vs. Chinese passenger and light truck tires, the CNIH said, in part due to the import duties actions taken in the U.S.

However, the group said it would be difficult to prove the industry was harmed — even if dumping could be proved — because Mexican production volume has increased by more than 6.5 percent during the first half of 2015.

The European Union imposes 4-percent duties on tires from China, even though the scale of imports from China through year-end 2014 was roughly equal to those coming into the U.S. — about 4.5 million units a month of consumer tires.

The European Tyre & Rubber Manufacturers Association has started commenting on the rise of Chinese imports into the EU, but as yet it appears no action is being considered.

The issue has been raised and discussed in South Africa over the past couple of years, according to media reports, but again no action has been taken.

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