Retreaders in 'holding pattern' amid economic uncertainty

FALLS CHURCH, Va. — Tire retreading companies in the U.S. were optimistic for increased sales in 2025 following the presidential elections, but now they are in a holding pattern, waiting to see how proposed widespread tariffs and a trade war with China will impact the economy, according to David Stevens, managing director of the Tire Retread & Repair Information Bureau (TRIB).

More than half of retreaders experienced a drop in revenues in 2024, but the same number, 63%, predicted a turnaround this year, according to TRIB's 3rd Annual Survey on the State of the Retread Industry.

The survey responses, however, were submitted before President Trump issued elevated import-tariff declarations on dozens of countries, including those who send tires to the U.S., such as Cambodia, China, Thailand and Vietnam. Then the administration issued a 90-day pause April 9 on those tariffs, but elevated tariffs on China.

For tire retreaders who compete with low-cost imported commercial tires from Asia, tariffs would benefit them in terms of leveling the price differential between new and retreaded tires, Stevens said.

"I think the big question that a lot of people have is what impact is it going to have overall on the economy," he said, as a downturn in the economy will impact the trucking industry negatively, which in turn affects the tire industry.

"On one hand, it's great if we can have protection from these subsidized, low-cost imports, but on the other hand, can we try not to damage the economy too much so that we still have tires to sell."

Elevated tariffs are a two-edged sword: They can raise the price of competing low-cost new tires, but they also could increase the cost of raw materials used in retreading.

"(Retreaders) are supportive of the tariffs on the one hand, in terms of those tires, but they're worried about the tariffs on raw materials," Stevens said.

The TRIB survey culled 189 responses from its membership of 350 retreading companies. About 78% of respondents are based in North America.

About 63% of respondents said their revenues decreased in 2024, while 23% saw an increase. However, 63% of respondents said they were expecting an increase in revenues this year, while 14% predicted a decrease and 23% expected no change.

Stevens said the downturn in retreading revenue last year was attributed to the uncertainty of a presidential election year.

"I think there was a real belief that there has been a holding pattern where we were waiting for the election and what was that was going to look like," he said, noting that retreaders were upbeat when the business-friendly Trump administration came into office.

"So I think at the end of 2024, a lot of people were optimistic about 2025 with the Trump administration coming in: less regulation, a focus on business-friendly practices, some of that demand that was sort of holding while the election happened, if changes were going to come in terms of inflation and investments from companies. I think people were optimistic about what was going to happen in 2025.

"And I think we've been in a holding pattern for the first few months more than many of our members first thought we would be."

The survey results indicated uncertainty in the market compared with recent years, Stevens said.

"When we did this a couple of years ago, everybody was very much in line with their forecasts for revenue looking at the rest of the year forward — this would have been early 2023. And what they were forecasting for the year, it ended up being exactly right. And they were all very consistent, like everybody was seeing growth and everybody was pretty specific about what type of growth they were going to see.

"The numbers this year were all over the map," Stevens said.

"Some people were forecasting an increase in revenue, some that were forecasting a decrease, all ranges — 2% rise or 20% decrease or a 20% increase. I think it speaks to the uncertainty that's in the market right now."

Even before the tariffs were increased, there was uncertainty in the market, he said.

"Everybody feels like there's pent up demand and that just a lot of people are waiting for a little more certainty to unleash those things, whether it's buying new equipment, investing in more staff, gearing up production."

He said there is a feeling that the floodgates for spending are ready to open but "everybody's keeping the floodgates closed until they figure out what exactly is going to happen."

The members said the biggest challenge facing their businesses were employment, followed, in decreasing order, by low-cost imported tires, rising costs, casing availability, supply chain issues and regulatory challenges.

TRIB noted that the concern over low-cost imported tires has steadily risen in importance from sixth place two years ago to second this year.

More than half, 57%, of retreaders surveyed said they have no plans to change their workforce count, while 29% plan to increase employment.

About 36% of respondents said they were making "minimal investments" in their operations while another 36% said they were not investing in their operations and 24% said they were making large investments.

Larger retreaders are expanding but taking a steady and slow approach to filling their capacity, Stevens said, noting they are often waiting for more demand.

"There are still investments being made in equipment and in plants, but I would say they're not filling those to capacity yet."

Like tariffs, new truck tire supply can be a two-edged sword.

As some tire makers curtail truck tire production in the U.S., it generally helps retreading, Stevens said, but eventually it negatively impacts casing inventory needed for retreading.

"If manufacturing slows down and freight slows down, are there enough casings for the industry to use? … That scarcity can help the retread industry because it encourages people to reuse the materials that are already in place, i.e. the casings that are out there," he said.

So far this year there is a good supply of casings for the retread market, Stevens said, due in part to a softening in retreading demand.

However, the increased tariffs could impact casing supply.

"A lot of our members in the U.S. bring casings in from overseas. A lot from Japan and Korea. So if there are tariffs on those as well, then what impact does that have on the casing market?" Stevens said.