WASHINGTON — The United Steelworkers union, in testimony prepared for an International Trade Commission (ITC) hearing May 25, is urging the ITC to support the Department of Commerce's decision to confirm the imposition of elevated antidumping duties on passenger and light truck tires from South Korea, Taiwan, Thailand and Vietnam.
In its testimony, the USW argues that "subject imports" increased their share of the domestic market for P/LT tires by 5.3 percentage points during the period of investigation, in large part because such products "undersold the domestic-like product about 90% of the time.
"Underselling at significant margins was nearly universal in all products," the USW contends, "covering tires from all countries and regardless of whether the imports and domestic product were branded or private label."
This underselling permitted imports to take market share from domestic producers and drive down domestic prices in most of the pricing products, the USW claims.
At the same time, the U.S. tire industry's "performance declined sharply," the USW said, with production, capacity utilization, shipments and employment all dropping by double-digit percentages.
The union contends the domestic industry's collective operating income fell over 30%, or nearly $1 billion, from 2018 to 2020, although the USW's submission to the ITC didn't provide documentation to back this up.
As a result, the USW stated, domestic producers were forced to slash capital expenditures by more than a third.
At the end of the period of investigation, the USW said, "this capital-intensive industry was not even able to invest enough to keep up with depreciation." Again, the union did not provide documentation to support its claim.
The union points out that since the elevated duties were imposed in January, imports of subject tires in the first quarter fell 15% below where they were a year ago and over 30% percent from the immediately preceding last quarter of 2020.
While true, it should be noted that overall, imports of passenger tires in the first quarter were essentially unchanged from 2020 while those of light truck tires were up 16.7%.
The union's introductory statement addresses several issues, such as branding, tiers, etc., but in the end contends the situation boils down to one overriding issue: price.
"Interchangeable imports used universal underselling to take market share," the union states, "driving the domestic industry's production, shipments, hours, and profits to all plummet much more sharply than the decline in demand. Highly export-oriented and growing foreign producers will continue to use aggressive pricing to take market share and injure the domestic industry if relief is not imposed.
"The only way to preserve the tenuous gains the industry has made this year is to keep the duties in place. For the sake of the industry, its workers, and their communities, we respectfully request that the Commission make an affirmative determination."
The union's presentation to the ITC also includes statements from USW President Tom Conway; Kevin Johnsen, chair of the USW's Rubber and Plastics Industry Conference; and the heads of union locals at consumer tire plants operated by Cooper Tire & Rubber Co., Goodyear and Michelin North America Inc.