When the United Steelworkers (USW) union filed a petition on May 12 for import duties on passenger and light truck tires from Thailand, Vietnam, Taiwan and South Korea, one had to wonder how seriously to take it.
Let's put it this way …
Since harsh antidumping (AD) and countervailing (CV) import duties were placed on China in 2015, there have been whispers about how some producers in that country were going about skirting them. One example is that a handful of major Chinese tire makers has invested heavily in building manufacturing plants in Southeast Asia in the last five years.
China's share of the U.S. passenger tire import market dropped to just 1.2% last year from 24.4% in 2014, for example.
Over that same time frame, Thailand has risen steadily to become the top importer of passenger and light truck tires to the U.S.
Last year, Thailand imported 37.3 million of the 154 million passenger tires shipped into the U.S., with South Korea No. 2 with 17.2 million, Vietnam No. 6 with 9.95 million and Taiwan No. 7 with 8.46 million. Together, that's nearly 73 million units, or 47% of the total.
Thailand also was No. 1 on the light truck tire import table, with 7.67 million units. Vietnam was No. 4 with 2.13 million, South Korea No. 6 with 1.99 million and Taiwan No. 9 with 671,154 units. Together they total 12.5 million, or 47% of the 26.7 million light truck tires imported.
Do you know which organization in 2009 and 2014 submitted the petitions for AD/CV import duties against China?
Yep, the USW.
So, when the USW filed AD and CV duty petitions with the U.S. Department of Commerce and the International Trade Commission (ITC) alleging companies in those four countries are dumping products in the U.S. at margins ranging from 33% (Vietnam) to 217% (Thailand), we knew it was something to keep an eye on.
At stake are more than 85 million tires imported from these nations last year, valued at $4.4 billion.
Imports from these nations have risen nearly 20% since 2017 and in the cases of Thailand and Vietnam reflect the opening of at least six tire factories in those two nations by Chinese tire companies.
The ITC has until June 29, to reach a preliminary determination on whether the U.S. should impose the duties.
The ITC essentially must determine if the tires sold in the U.S. were done so at less than fair value to undermine and harm U.S. domestic production.
If these duties are found to be warranted and eventually imposed on the four countries, it would have a big impact on the tire market. There's even potential that the change in price could bring China back into the picture as a viable source.
Of course, that is way down the road.
First, the ITC has to give the OK to move forward. Then, the Department of Commerce will hold hearings — a lot of them.
Interested parties wishing to comment officially on the petition may do so by email at [email protected] Make reference to investigations 701-TA-647 and/or 731-TA-1517-1520.
Parties wishing to submit documents must do so through the ITC's Electronic Document Information System (EDIS). Parties must set up an account through the EDIS to do so.
The deadline to submit written opening remarks and testimony is June 1, and for written brief with information and arguments pertinent to investigation is June 8.
It will be compelling to watch how this latest petition unfolds. If duties are, indeed, imposed, it could shift the landscape of the U.S. aftermarket significantly once again.