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May 13, 2020 05:26 PM

USW seeking higher tire import duties on Korea, Taiwan, Thailand, Vietnam

Tire Business Staff
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    PITTSBURGH — The United Steelworkers (USW) has filed antidumping (AD) and countervailing duty (CVD) petitions on what it's calling "dumped and subsidized" passenger and light truck tires from South Korea, Taiwan, Thailand and Vietnam.

    The USW's petitions with the Department of Commerce and the International Trade Commission allege dumping margins as high as 217% for Thailand, 195% for South Korea, 147% for Taiwan and 33% for Vietnam.

    The petitions also detail numerous government subsidies benefitting Vietnamese tire producers, including loans, tax breaks, and grants.

    Passenger and light truck imports from these four countries increased nearly 20% from 2017 to 2019, reaching 85.3 million tires, valued at $4.4 billion last year, the USW claims.

    "This deluge of unfairly traded imports hurt our domestic industry and workers, including many USW members," USW International President Tom Conway said.

     

    Tire Business Managing Editor Dave Manley and Reporter Bruce Davis discuss the USW petition:

    "Even though demand for (these) tires increased, domestic producers were still forced to grapple with reduced market share, falling profits and lost jobs," he added.

    The USW obtained AD and CVD orders on passenger/light truck tires from China in 2015, and Chinese imports have since shrunk dramatically, allowing the domestic industry to invest in new capacity in the U.S.

    Ironically, those duties are up for review this summer under the Commerce Department's sunset regulations.

    Chinese producers, looking for continued access to the U.S. market, invested in facilities in Thailand, Malaysia and Vietnam as "offshore" sources for consumer tires to export to the U.S. without paying the elevated AD or CVD duties imposed on products from China.

    USW image

    "Slowing Chinese imports was vitally important to saving the domestic tire industry," according to Kevin Johnsen, who chairs the USW's Rubber and Plastics Industry Conference.

    "But Chinese producers found a way around our safeguards, and other bad actors are eager to take advantage of U.S. demand."

    The USW's petition is also the first petition to contain a currency undervaluation subsidy under new rules the Department of Commerce issued earlier this year. It alleges that the Vietnamese government's systematic undervaluation of the Vietnamese dong in relation to the U.S. dollar constitutes a countervailable subsidy.

    "The USW has long sounded the alarm on the dangers of currency manipulation and its impact on trade," Mr. Conway said.

    "Now, under the Commerce Department's new rules, we must address it for what it is: an illegal subsidy."

    The Covid-19 crisis is putting even more pressure on domestic producers, increasing the stakes of addressing unfair trade, Mr. Conway said.

    "The only thing domestic producers should be worrying about right now is how to restart their operations safely," he continued. "Yet even as they face falling demand in the wake of this deadly disease, they're still struggling with unfairly traded imports that have continued largely unabated. Our only chance to preserve thousands of good, family-sustaining jobs is to stem this tide."

    The USW represents thousands of workers at nine consumer tire factories operated by Cooper Tire & Rubber Co. (Findlay, Ohio, and Texarkana, Ark.); Goodyear (Fayetteville, N.C., Gadsden, Ala., and Topeka, Kan.); Michelin North America Inc. (Fort Wayne, Ind., and Tuscaloosa, Ala.); Sumitomo Rubber North America (Tonawanda, N.Y.); and Yokohama Tire Corp. (Salem, Va.)

    Tire Business graphic by Michael McCrady

    Passenger and light truck tire imports, 2019 vs. 2018, as reported by the U.S. Department of Commerce.

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