AKRON (Aug. 31, 2015) — You say “po-tayt-o—I say po-taht-o.” That, in a figurative nutshell, sums up the U.S. International Trade Commission's (ITC) recent opinion on Chinese tire imports.
The commissioners were faced with determining whether the U.S. tire manufacturing industry was harmed by rising imports of passenger and light trucks from China—and therefore was deserving of antidumping and countervailing duties on said imports.
Six ITC commissioners sifted through the reams of evidence collected over 15 months of investigation, then three of them ruled for and three against the petition.
Under ITC rules, a 3-3 vote represents an affirmative determination of material injury, meaning that the countervailing and antidumping margins calculated by the U.S. Department of Commerce were valid and therefore enforceable.
The three commissioners voting to impose duties—Vice Chairman Dean Pinkert and Commissioners Irving Will¬iamson and Rhonda Schmidt¬lein—did so because they believed the United Steelworkers' views of the market situation were accurate.
“This increase in market penetration at the expense of the domestic industry is particularly noteworthy in light of the fact that subject imports competed in overlapping geographic markets and segments of the U.S. market with the domestic industry,” the com¬missioners wrote.
Those in favor also stressed in their opinion that Chinese tire imports “pervasively undersold domestic tires at sizable and increasing margins” from 2012 through 2014.
The dissenting commissioners—Chairman Meredith Broadbent and Commissioners David Johanson and F. Scott Kieff—pointed to data that showed the domestic tire industry maintained steady levels of output and employment during the period under invesigation.
“While the domestic industry lost market share during a time of rising demand, we have found that the decline in market share was not directly related to subject import volume increases, and the decline in market share coincided with significant improvement in the domestic industry's financial position,” the dissenters wrote.
They also pointed out that the rising tide of tires from China did not have a measurable effect on industry tire pricing, noting other industry factors having considerable influence as well.
In their assessment of the situation, the assenting commissioners noted that the legal standard called for the ITC to “consider the volume of subject imports, their effect on prices for the domestic-like product and their impact on domestic producers of the domestic-like product, but only in the context of U.S. production operations.”
The statute defines “material injury” as “harm which is not inconsequential, immaterial or unimportant.”
The commissioners also noted, though, that the statute's language leaves the final determination to the “reasonable exercise of [the Commission's] discretion.”
Po-tayt-o? Po-taht-o? Can you decide?
This editorial appears in the Aug. 31 print edition of Tire Business. Have an opinion on it? Send your comments or a letter to the editor to [email protected].