Tire import growth slows amid supply chain woes

WASHINGTON — Imports of tires into the U.S. through the first nine months of 2021 are on track to eclipse record shipments of 2019, although the pace of importing slowed considerably in the third quarter, reflecting the supply-chain issues plaguing the nation's economy.

Imports of passenger and light truck tires during the third quarter edged up 3.7% and 6.4% over the corresponding 2020 period, according to Tire Business' analysis of the U.S. Department of Commerce data, but both still are on pace through three quarters to match or exceed record imports of 2019.

Truck tire imports registered gains of 41.3% and 41.4% for the quarter and nine-month periods.

• This story appears in the Nov. 22 print edition of Tire Business. Subscribers may download the edition here.

While imports are up overall across all categories, the effects of the U.S.' decision earlier this year to impose elevated import duties on passenger and light truck tires from South Korea, Taiwan and Thailand are readily apparent in the data.

Passenger tire shipments from Taiwan — whose tire makers, in particular, were hit the hardest by the duties — plunged 66.4% in the quarter and 46% during the January-September period. On the light truck side, shipments from Taiwan fell 55.2% in the first nine months of 2021, dropping Taiwan out of the top 10 sources of such products.

The elevated duties on Taiwanese products have prompted at least two companies — Federal Corp. and Nankang Rubber Tire Corp. — to suspend business in the U.S. for the time being, and a third, Kenda Rubber Industrial Co. Ltd., to shift nearly 100% of the production intended for the U.S. to its plant in Trang Born, Vietnam.

According to media reports in Taiwan, Federal has consolidated its production down to one factory, and Nankang has been acquiring Federal shares on the open market as part of a strategy by Nankang management to leverage the strengths of the companies' manufacturing assets.

Neither Federal nor Nankang has manufacturing capacity outside of Taiwan in a country not impacted by elevated U.S. import duties.

Cheng Shin Rubber/Maxxis International is the other major producer in Taiwan.

It received a lower antidumping duty from the U.S. and thus is not affected as severely as Federal, Kenda or Nankang.

Passenger and light truck tire shipments from Thailand also have fallen, dropping 21.3% and 14.2%, respectively, in the quarter. These declines were sufficient enough to leave Thailand's imports in these categories for the year-to-date behind their 2020 pace by 3.4% and 4.3% respectively.

Imports from South Korea dropped 1.5% in the quarter and are down 2.6% for the year-to-date.

While shipments into the U.S. from South Korea, Taiwan and Thailand all fell in the quarter, overall imports were up, with various other nations stepping in to fill the void.

Mexico, especially, has ramped up its exports to the U.S. in the passenger and light truck sector.

For the nine months ended Sept. 30, passenger tire imports from Mexico surged 64.1% to 15.4 million units, solidifying the nation as the No. 2 source of imported tires.

Imports of light truck tires have risen even more — up 78.3% to 2.38 million units — making Mexico the No. 4 nation in this category.

Bridgestone Corp., Goodyear/Cooper Tire, JK Tyre, Michelin Group and Pirelli Tyre all have manufacturing capacities in Mexico.

Overall, passenger tire imports were up 16.5% through September to 115.5 million units. This volume of shipments is slightly ahead of 2019, as well, according to Tire Business' analysis of the data.

Other nations whose imports are up considerably this year include:

• Chile — up 60.7% to 3.84 million units;
• Malaysia — up 49.8% to 2.62 million units;
• Canada — up 36.9% to 8.47 million units;
• Indonesia — up 28% to 11.1 million units; and
• Japan — up 26.7% to 6.13 million units.

In the light truck tire category, imports of 25.3 million for the nine-month period were 32.8% ahead of 2020 and nearly 28% ahead of 2019.

With the exception of Thailand, all of the other top trading nations in this category raised their exports to the U.S. by double digits, or in at least two cases, by triple digits.

The growth leaders, in percentage terms, are: Philippines, up 303.8%; China, up 115.3%; Mexico, up 78.3% and Vietnam, up 75.5%.

Shipments from South Korea, the other nation hit by the elevated import duties, fell 14.6% in the quarter, but are up 15.6% for the nine months.

Considering the marked drop in the pace of importing in the third quarter and the continuing supply-chain issues plaguing nearly every company that distributes imported tires, the full-year numbers could tell a different story.

In the medium truck/bus tire category, Thailand continues to strengthen its status as No. 1, boosting shipments to the U.S. by 63.3% in the quarter and 58.8% for the year-to-date. Thailand's exports to the U.S. over the nine months of 5.22 million units represent over 40% of overall imports, up from 36% a year ago.

Vietnam has risen to No. 2 in this category with a nearly 75% jump in exports to the U.S. this year so far.

In all three categories, the average value of imported tires has gone up each quarter this year.