WASHINGTON—The U.S. Department of Commerce has instituted antidumping and countervailing duty investigations against truck and bus tires imported from China after weighing opinions on the matter voiced at a preliminary International Trade Commission (ITC) hearing Feb. 19 on petitions brought by the United Steel-workers (USW) union.
On that day, USW representatives told the ITC that aggressive underselling, lost market share and declining domestic production of truck and bus tires were compelling evidence of material injury caused by Chinese imports.
Commerce said it found dumping margins ranging from 19.91 to 22.57 percent against Chinese truck and bus tire imports, and subsidy rates above de minimis levels, which in this case would be less than 2 percent, according to an International Trade Administration data sheet on the case.
The ITC is scheduled to vote March 11 on whether to pursue the truck and bus tire investigations, and to transmit its decision to Commerce March 14. If the ITC votes in the affirmative, Commerce will make its preliminary determination on countervailing duties on or about April 25, and its preliminary determination on antidumping duties on or about July 7.
The sole unified dissenting voice at the ITC hearing came from manufacturers, distributors and users of 10.00x20 bias-ply tube-type tires for marine intermodal chassis, who said their products do not compete with any U.S.-made tires and should not be part of the investigation.
Both the ITC hearing and the Commerce investigations are based on petitions the USW filed with the ITC on Jan. 8.
USW International President Leo W. Gerard said the union approves of the ITC's and Commerce's actions.
The volume of truck and bus tire imports from China grew to 8.91 million units last year from 8.38 million in 2014 and 6.3 million in 2013, according to Commerce figures. The dollar value of those shipments totaled $1.07 billion last year, vs. $1.08 billion in 2014 and $885 million in 2013.
The Commerce probe specifically exempts recycled, retreaded and non-pneumatic tires, but ITC investigators asked the USW in its questionnaires before the Feb. 19 hearing whether retreaded truck and bus tires should be included.
Terence P. Stewart, a Washington attorney representing the USW, said it was difficult for the union to answer this question because it does not organize any of the 680 U.S. retreading facilities.
“If the commission views the issue of the inclusion of retreaded tires in the domestic like product to be potentially important to its analysis, it will need to collect additional information on retreaded tires in the final phase of the investigation,” he said.
However, Mr. Stewart and the other witnesses for the USW said the evidence against Chinese producers of new truck and bus tires is damning.
Chinese truck and bus tire imports increased 41.3 percent between 2013 and 2015, the USW said, and China has accounted for more than 60 percent of all imports in that category for the past several years.
Despite a 17.4-percent increase in U.S. truck and bus tire demand during the three-year period, U.S. production in that sector remained virtually flat because of Chinese imports, the union said. Production did increase last year, however, 2.1 percent to 14.8 million units, according to Rubber Manufacturers Association data.
Meanwhile, the union said China has the capacity to produce 150 million truck and bus tires annually—enough to supply the entire world's demand, and enough to supply U.S. demand six times over.
The USW represents roughly 6,000 workers at five of the nine truck and bus factories in the U.S.—Bridgestone Americas in LaVergne and Warren County, Tenn.; Goodyear in Danville, Va., and Topeka, Kan.; and Sumitomo Rubber North America in Buffalo, N.Y.
These plants account for more than two-thirds of domestic capacity for truck and bus tires, although the union claims all of them have seen production cutbacks and deferred expansion plans because of Chinese imports.
Production in the first two months of 2016 already is down 13 percent from 2015 levels, it claims.
The union did not comment on the four non-union truck tire plants nor on the fact that tire makers have invested or have committed to invest more than $2 billion in new and/or expanded truck tire capacity at those plants.
The reported production downturn, which the union blames entirely on import competition, threatens the 6,000 jobs in the five USW-organized plants, the union said.
“These unfairly traded imports have taken shipments and market share from domestic producers, deeply undercut prices, and prevented our industry from participating in an extraordinary period of growth in domestic demand,” said Stan Johnson, USW International secretary-treasurer.
Representatives of the marine intermodal chassis business did not dispute any part of the USW's testimony. However, they said the Chinese-produced tires they use pose no threat to any domestic tire makers.
“The U.S. marine intermodal chassis business is unique in the global maritime transportation system, and the intermodal bias-ply tube tire, mounted on a two-piece rim, is unique to our industry,” said Bernard J. Vaughan, chief legal officer and executive vice president of administration at Flexi-Van Leasing Inc. of Kenilworth, N.J. “To the best of my knowledge, no one other than chassis owners use this type of tier in the United States.”
China exports about 175,000 intermodal tires to the U.S. annually, according to Ned Marshak, a Washington attorney representing the Institute of International Container Lessors Ltd.