The imported tires undersold comparable domestic products in 55 of 56 quarterly comparisons, the commissioners noted. Underselling margins ranged from 13.7 to 67 percent, they said.
“This underselling enabled subject imports to gain market share at the expense of the domestic industry during the POI,” stated the majority ruling issued by ITC Vice Chairman Dean Pinkert and Commissioners Irving Williamson and Rhonda K. Schmidtlein.
Nevertheless, the three commissioners found that the increased imports had no significant impact on the tire prices offered by U.S. producers. Prices for both the domestic and Chinese tires fell sharply during the POI, they said.
“These price declines occurred at the same time as substantial declines in the prices for natural rubber and synthetic rubber,” they said. Because of this, the commissioners stated that it is impossible to determine at this time whether the drop in prices was caused by imports or by other factors.
However, the commissioners determined that all the indicators showed a significant negative impact on the domestic tire industry.
“As a result of lost market share caused by significant and increasing volumes of low-priced subject imports, the domestic industry, which had the ability to increase its production and shipments, was unable to increase its shipments commensurate with growing demand,” they said.
In a separate decision, Commissioner David S. Johanson said he did not find existing material injury in the domestic tire industry, but he did find that Chinese imports posed a significant threat of material injury.
“Although I do not find the domestic industry vulnerable to material injury, I do find that the likely increase in subject import volume, combined with the likely adverse price effects, will likely result in a worsening of the domestic industry's condition and material injury in the near future,” Mr. Johanson wrote.
Ms. Broadbent and Mr. Kieff, however, said four circumstances disproved material injury:
- The lack of significant evidence of price-suppressing effects;
- The high and increasing profitability of the domestic tire industry throughout 2013-2015;
- The inability of the domestic tire industry to increase shipments because of capacity constraints; and
- The unlikelihood that future high levels of imports will hurt the domestic industry.
Raw materials costs fell precipitously during the POI, far more than the price of truck and bus tires, Ms. Broadbent and Mr. Kieff said.
“Although apparent U.S. consumption increased during the POI, we do not find significant price suppression in light of the substantial decline in costs relative to prices and the lack of evidence of and cost-price squeeze experienced by the industry,” they wrote.
In addition, the commission decided against giving the marine intermodal industry an exemption for 10 x 20 bias tires manufactured solely on intermodal marine chassis. There was no clear dividing line between those tires and other truck and bus tires, the commissioners ruled.
However, the commission did decide to exclude retreaded truck and bus tires from the investigation. Between retreaded and new truck-bus tires, “there are clear distinctions in manufacturing processes, facilities, employees and price,” it said.
The 154-page determination can be found by clicking here. The next action in the investigation — the Commerce Department's preliminary determination on countervailing duties — is expected on or about June 27.
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