USW files memorandum to reverse ITC decision on Chinese imports

NEW YORK — The United Steelworkers (USW) union is asking the U.S. Court of International Trade (CIT) to reverse and remand the International Trade Commission's (ITC) negative determination on import duties on truck and bus tires sourced from China.

The USW filed a memorandum before the CIT Sept. 1 seeking the court's action.

The ITC ruled 3-2 on Feb. 22 that Chinese truck and bus tire imports were not causing material injury to the U.S. truck and bus tire industry, after initially ruling the opposite a year earlier. 

The USW, which petitioned the ITC for relief from Chinese imports in January 2016, filed its original complaint with the CIT April 14, 2017, arguing that the agency's decision contradicted all the relevant evidence in the antidumping and countervailing duty cases.

The Sept. 1 memorandum expanded on the USW's arguments in favor of its motion for judgment.

"In its analysis of the conditions of competition, the majority (of the ITC commissioners) concluded that purchasers would buy higher-priced tires due to alleged differences between domestic and Chinese tires in quality, warranties, tiers and other non-price features," the USW said in its memorandum.

This conclusion, however, was not supported by substantial evidence, the union argued.

"The record established there was a moderate-to-high degree of substitutability between domestic and Chinese tires, and that they were comparable with regard to quality, availability, warranties, and other non-price factors," the USW said.

The ITC majority's determination on adverse price effects in the U.S. tire market also was unsupported by evidence, the union claimed.

"The majority erroneously concluded that declines in prices were due to falling raw material costs, failing to explain why prices fell faster than costs in the aftermarket, where competition with subject imports was greatest," it said.

The majority also erred in its analysis of modest improvements in the domestic tire industry's performance in the context of the business cycle and conditions of competition, according to the USW.

"The domestic industry's performance indicators rose much more slowly than the rapid increase in demand as the cycle hit its peak," it said.

The majority also was mistaken in its assumption that the domestic industry's high capacity utilization rates were a sign that Chinese imports were not causing injury, the union said.

Representatives of Chinese tire manufacturers held fast to their position that the ITC reached the correct conclusions in making a negative determination.

"We believe that the ITC got it exactly right, and that the USW appeal is without merit," said Walt Weller, senior vice president, strategic accounts at China Manufacturers Alliance L.L.C. (CMA), a wholly owned subsidiary of Double Coin Holdings Ltd. and the domestic distributor of Double Coin tires.

All the major domestic tire brands are in back order at this time, according to Mr. Weller.

"How can they make up for the shortfall in demand when they're in a back order situation?" he said. "The idea that the domestic industry could fill the gap is absurd."

On Jan. 23, a month before the ITC ruled against duties, the U.S. Department of Commerce levied final antidumping duties of 9 to 22.57 percent against Chinese truck and bus tire makers, and final countervailing duties of 38.61 to 65.46 percent.

On Feb. 14, Commerce lowered the countervailing duty range to 20.98 to 63.34 percent.