Davis: Tier-ful exercise at ITC hearings

WASHINGTON — Over the past decade-plus, the U.S. Commerce Department has considered a dozen or so requests for relief from tire imports in the form of duties imposed on imports.

With the singular exception of Titan International's support of duties on off-highway tires from India, these actions have come exclusively from the United Steelworkers (USW) union, which represents more than 15,000 hourly wage workers at 20 tire factories throughout the U.S.

In none of the other actions have tire makers with U.S. production capacities, which stand to benefit from the imposition of import duties, supported the USW's efforts to convince the decision makers at Commerce of the need for such duties — publicly at least.

To assess whether a domestic industry is being injured by imports — and thus whether import duties are warranted — the ITC solicits commentary from all potentially affected parties and almost always holds a hearing to allow those who wish to comment publicly to do so.

Much of the information provided to the ITC, however, is submitted as "confidential," meaning the contents of such submissions are viewable only by ITC officials and personnel and those companies and/or individuals accepted by the ITC as qualified participants in the process.

Since our colleague Miles Moore (our Washington reporter for more than four decades) retired a few years ago, I have taken on the responsibility of covering much of what goes on in D.C. that affects the tire industry. That responsibility includes listening to or viewing the hearings remotely — a procedure made necessary by the outbreak of the COVID-19 pandemic in early 2021 and now a great convenience for those unable to attend the hearings.

Most of the time, these hearings provide key insight into the various parties' motives, positions and defenses, as well as the commissioners' positions on the matters, based on their lines of questioning.

The most recent case, the one covering imports of truck/bus tires from Thailand, was less transparent than other cases I've followed.

First of all, there was only one company from the potentially impacted side of the issue — Prinx Chengshan Tire North America Inc. — willing to testify in person on behalf of the Thai tire makers and importers of Thai tires to counter the USW's arguments.

Kudos to Sam Felberbaum, president; Ken Coltrane, vice president, marketing and development; and Michael Chu, CEO, who were on hand to provide both prepared statements and to answer questions from commissioners.

While both parties presented what most would have anticipated — testimony skewed heavily to show their respective positions — what surprised me here was the apparent lack of preparation on behalf of the ITC commissioners and staff.

While I have to acknowledge at this point that the commissioners and their staffs are called on to evaluate dozens and dozens of cases every year covering myriad product categories, their lines of questioning in this case came off as ill-prepared and/or ill-informed, in contrast to some other cases I've followed.

Despite reams of evidence supplied by both sides on a number of topics salient to the issue at hand, the commissioners and staff kept drilling into the issue of tier segmentation while also running down dead-end rabbit holes on natural rubber pricing and supply and other peripheral issues.

The commissioners' trouble with grasping tier segmentation in the tire industry has cropped up before in other import duty cases. And in this case, they played into the hands of the USW's legal counsel, who on several occasions during the hearing referred derisively to the "so-called" concept of tier segmentation.

One has to wonder: Do they expect all the shampoo or toothpaste or beer or whatever at a grocery store to be priced identically? Based on their lines of questioning during these hearings, that appears to be the case, and quite likely will play a considerable role in the final determination.

At the same time, most industry pundits were aware that an antidumping case involving tires from Thailand was inevitable.

We reported, for instance, after the 2019 SEMA Show on the matter in a piece headlined: "Chinese tire firms eye U.S. revival with Thailand, Vietnam plants."