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March 22, 2017 02:00 AM

One vote altered final ITC antidumping decision

Miles Moore
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    WASHINGTON — The shift of one vote caused the International Trade Commission (ITC) to make a final determination that the U.S. truck and bus tire manufacturing industry is not being materially injured because of imports from China.

    The ITC made a negative determination on material injury against the U.S. truck and bus tire industry Feb. 22 on a 3-2 vote. A year earlier, the commission made an affirmative preliminary determination by a 3-2 vote.

    The ITC made its final report available to the public on March 22.

    ITC Vice Chairman David S. Johanson voted with Chairman Rhonda K. Schmidtlein and Commissioner Irving A. Williamson in the preliminary determination in favor of a finding of material injury. At that time, however, Mr. Johanson filed his separate views.

    In his preliminary views, Mr. Johanson agreed with most of the findings of Ms. Schmidtlein and Mr. Williamson. He found that Chinese imports increased in both absolute terms and relative to U.S. consumption and production during the 2013-2015 period of investigation.

    During the period, he said, Chinese imports captured 5.1 percentage points of market share from the domestic industry.

    Mr. Johanson also found that imports from other countries, though gaining in U.S. market share, gained less than Chinese imports.

    "In 31 of 37 quarterly comparisons between the prices of imports from China and Canada, the prices of imports from Canada were higher than those from China," he wrote. "The prices of imports from Canada were even higher than U.S.-produced tires in nearly half of the quarterly comparisons."

    Considering data on capital investments in the domestic industry, Mr. Johanson said he found it unlikely that the domestic industry would perform as well in the near term as it did during the period of investigation.

    "Nevertheless, given the domestic industry's performance throughout the period, I do not find that the domestic industry is currently in a vulnerable state," he said.

    In the final determination, Mr. Johanson voted with Commissioners Meredith M. Broadbent and F. Scott Kieff, who repeated their negative findings on material injury.

    "The domestic industry was able to increase output, employment and profitability levels during the period of investigation," said the majority opinion in the final ITC report.

    "While the domestic industry lost market share during a time of rising demand, we have found that the decline of market share was due to capacity limitations and very high capacity utilization, rather than to the subject imports," the document said.

    "We further found that the increased volume of low-priced subject imports had no significant price effects and coincided with significant improvement in the domestic industry's condition," it said.

    In their dissenting views, Ms. Schmidtlein and Mr. Williamson wrote, "We find that a significant volume of subject imports from China has undersold the domestic like product, significantly depressed U.S. prices and caused material injury to the domestic industry."

    Ms. Schmidtlein and Mr. Williamson discounted evidence that the domestic industry's performance improved during the period of investigation.

    "The U.S. industry was profitable, and profits grew over the period, but the overall increase was modest considering the significant increase in demand over the investigation period and the opportunity to benefit from lower costs," they wrote.

    The United Steelworkers union petitioned the ITC for antidumping and countervailing duty relief against Chinese truck and bus tire imports in January 2016. Commissioner Dean A. Pinkert did not participate in the investigation. Shortly after the final vote was taken, Mr. Pinkert announced his return to private law practice.

    According to the ITC, there are seven truck and bus tire plants in the U.S., employing 6,629.

    The apparent dollar value of truck and bus tire consumption in 2015 was $6.1 billion, the ITC said.

    Chinese imports accounted for $1.2 billion of that total, with $1.3 billion coming from other countries including Canada, Japan and Thailand.

    China continued last year as the No. 1 source of imported truck/bus tires, despite shipments falling 14.4 percent, to 7.63 million units. Overall imports were off as well, by 3.8 percent to 13.9 million units.

    Thailand's truck/bus tire exports to the U.S. jumped 98.7 percent to 1.82 million units, making that nation the No. 2 source of imported truck tires last year.

    Canada, Japan and South Korea were third through fifth on the list, with South Korea's exports to the U.S. growing 85.1 percent to 421,239 units.

     

     

    Related Articles
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    ITC decision leaves USW, retreaders reeling
    EDITORIAL: ITC decision has winners and losers
    China slides to No. 2 U.S. tire trading partner
    TRIB disappointed with ITC decision on Chinese truck, bus tires
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