WASHINGTON—The tire industry is occupying a great deal of the U.S. Department of Commerce's time these days as it deals with separate petitions from the United Steelworkers (USW) union to consider action on imports of certain pneumatic OTR tires from China, India and Sri Lanka and truck and bus tires from China.
Commerce already has agreed to proceed with antidumping and countervailing duty investigations of pneumatic OTR tires from China and India and a countervailing duty investigation of OTR tires from Sri Lanka.
Separately the agency has scheduled a preliminary hearing Feb. 19 to determine the merits of the USW's petition regarding truck and bus tires from China, which the union claims undersold U.S.-produced products by 57 to 62 percent during 2012-14.
Titan Tire Corp. is supporting the USW's call for action on OTR tires. Both Titan and the union filed petitions with the International Trade Commission (ITC) Jan. 8 seeking action.
In antidumping and countervailing duty investigations, it is the role of Commerce to determine the rate of dumping and subsidy margins, and the ITC's to determine whether the domestic industry is being materially injured because of dumping and subsidies.
At a Jan. 29 ITC hearing on the OTR tire issue, importers of OTR tires from China, India and Sri Lanka claimed the Titan/USW petition for import duties is a gross misinterpretation of the facts, saying a cyclical downturn in the original equipment OTR market, not increased imports from Asia, are responsible for Titan's reduced OTR tire sales.
Additionally, they contended that lower raw materials costs, not increased imports, caused the decline in OTR tire prices in the U.S.
The tires covered under the Commerce investigation are both tubeless and tube-type, radial and bias, original equipment and replacement, the agency said in a Feb. 4 fact sheet on the investigation, and restricted to tires with rim diameters of 39 inches or less.
Excluded from the investigation are unmounted Chinese OTR tires, which are covered under a previous antidumping and countervailing duty order from 2008. Titan and the USW were also the petitioners in this case filing in 2007.
The alleged dumping margins in the case are 11.2 to 77.69 percent for Chinese tires, 10.77 to 76.45 percent for Indian tires, Commerce said. Estimated subsidies for all three countries were above de minimis, which Commerce defines as less than 1 percent for developed countries, less than 2 percent for developing countries.
According to Department of Commerce data, China is the No. 1 source of imported agricultural/implement and construction/industrial tires, accounting for 46 percent of 2.19 million ag tires and 43 percent of 2.62 million construction tires imported into the U.S. last year. (See table at right)
The ITC is scheduled to make a preliminary determination on the case Feb. 19 and transmit its decision to Commerce Feb. 22.
If the ITC's determination is affirmative, Commerce will make a preliminary determination on countervailing duties on or about April 8, and on antidumping duties on or about June 22.
If the ITC makes a negative determination, the investigation will be terminated.
The USW said it represents workers producing OTR tires at Titan International Inc., Bridgestone Americas Inc. and Goodyear at six plants in Illinois, Iowa, Kansas and Ohio. Neither Bridgestone nor Goodyear has voiced support for the petition. Michelin North America produces OTR tires at two plants in South Carolina.
As for truck tires, the union—which sought and won dumping and countervailing duties in 2014 on passenger and light truck tires from producers in China—is requesting the ITC “conduct an investigation under sections 701 and 731 of the Tariff Act of 1930 regarding the imposition of anti-dumping and countervailing duties on imports of truck and bus tires from China.”
The union alleges dumping margins on truck tires of 19.78 percent, with certain customs districts having alleged margins as high as 58.2 percent. The countervailing duty petition alleges 39 programs provide subsidies.
“Once again we are taking action to stop the unfair trade practices of China from damaging our members' good jobs and the U.S. manufacturing base,” USW International President Leo Gerard said in a statement. “In a period of strong demand, American industry has seen all the growth in demand go offshore, with China being the biggest problem.
“The inability for American industry and workers to participate meaningfully in the growth of domestic demand during the last four years is symptomatic of the problems we continue to face. Chinese dumping and subsidization totally distort the U.S. market in tires and in many other manufactured products,” he said. “We need prompt action by the administration to prevent further harm to the domestic tire industry....”
According to the petition, imports from China grew 33 percent to 8.38 million units in 2014 from 6.3 million in 2012, and increased again last year.
China is by far the No. 1 source of imported medium truck and bus tires, according to Tire Business research, accounting for nearly 62 percent of the 14.4 million truck tires imported in 2015. Imports from China last year rose 6.3 percent to 8.91 million units, according to the latest Commerce statistics.
As such, truck and bus tires imported from China represent nearly half of the U.S. replacement market, based on a comparison of U.S. Commerce Department and Rubber Manufacturers Association data.
The customs value of the Chinese truck tires is $1.07 billion, or $120.22 per tire, the Commerce Department data show. This is down from the $128.38 per tire average in 2014.
During the two years studied by the USW in its petition, U.S. demand for truck/bus tires rose by 1.8 million tires, or 8.45 percent; imports from China grew by one-third, or 2.1 million tires.
“As a result,” the union said, “domestic producers saw their shipments decline by 800,000 tires, or 7.48 percent, and they participated in none of the demand growth over the period.”
The USW contends in its petition that U.S. and Chinese truck and bus tires are essentially interchangeable, offered along the same array of sizes and products including steer, drive, trailer and all-position tires.
All types of truck and bus tires share common production facilities, production processes and employees, according to the petition. Customers and producers alike perceive all truck and bus tires as similar products, and they are offered along a continuum of prices, it said.
The USW represents the workers at five of the eight truck and bus manufacturing facilities in the U.S.—Bridgestone Americas in LaVergne and Waren County, Tenn.; Goodyear in Danville, Va., and Topekas, Kan.; and Sumitomo Rubber North America in Buffalo, N.Y.—encompassing approximately 6,000 workers and nearly two-thirds percent of daily domestic truck and bus tire manufacturing capacity.
None of the domestic tire makers has thus far voiced support for the USW's petition.
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