Our View: Time will tell full impact of duties

Editor's note: The original version of this story has been corrected the clarify the role of the ITC.

Recent action brought to an end a yearlong investigation into certain Asian-made tires that may be sold or were sold in the U.S. at less than fair value.

The full impact of duties imposed by the U.S. Department of Commerce (DOC) on tires produced in South Korea, Thailand and Taiwan will take time to be felt, especially amid global pandemic recovery.

The U.S. International Trade Commission (ITC) determination June 23 cleared the way for antidumping rulings on certain Asian passenger and light truck tire imports. The ITC, headed by six commissioners, is an independent agency within the executive branch of government. The ITC determines injury or potential injury to imports. Its determination has no impact on duties but is required by statute.

The ITC terminated the investigation into dumping of tires from Vietnam, but it did clear the way for a countervailing ruling on those P/LT tire imports.

The DOC has determined that elevated duties on imports valued at nearly $4 billion annually are called for.

The United Steelworkers (USW) union, which petitioned for the investigation, argued that those imports sold for less than fair value, ultimately taking work away from U.S. workers. A fair playing field, they argued, would create more jobs domestically.

Of course, it's not quite that simple as the U.S. tire industry is a global one. Let's not forget that imports comprise more than half of the replacement tire market in the U.S.

Among U.S.-based companies affected by Commerce's ruling are: Achilles Tires USA Inc.; American Kenda Rubber Ind. Co. Ltd.; American Omni Trading Co.; Atturo Tire Corp.; Duro Tire & Wheel; Federal Tire North America Inc.; Foreign Tire Sales Inc.; Hankook Tire America Corp.; Horizon Tire Inc.; Kumho Tire USA Inc.; Ling-long Americas Inc.; Maxxis International – USA; Nexen Tire America Inc.; Omni United; Sentury Tire USA Inc.; TBC Corp.; Tireco Inc.; Vee Tyre & Rubber Co.; and Zafco International L.L.C.

Atturo President Michael Mathis, whose company's tires primarily are produced in Thailand and Taiwan, said there were flaws in the investigation, especially in terms of branding — an issue we tackled in our June 7 editorial.

"The investigation process really wanted to lump all imported products … into the same category as U.S.-made Michelin, BFGoodrich, Cooper, Goodyear, and then compare the prices across those," Mr. Mathis said while speaking with Tire Business during a recent livestream.

"And even inside those groups, they are comparing different types. So they're comparing the price of LT all-terrain or mud terrain against a passenger tire … and comparing the price between them, as if they're the same."

Much of the impact, he said, is hitting Tier 3 and 4 tire brands, which are produced almost exclusively outside of the U.S. He said as the U.S. fleet of vehicles ages, value brands are becoming more important to consumers.

"But the DOC and ITC actually view inflated prices as a positive outcome of their antidumping investigation. And I think that really leaves the consumer holding the bag on this stuff, because in the end, all taxes are paid by people."