“Comparing to last year’s anti-dumping and anti-subsidy probe over semi-steel tires, the present probe over all-steel tires has much greater impacts on China’s tire industry.”
Xu Wenying, deputy chairwoman and secretary general of China Rubber Industry Association, expressed her concern over the anti-dumping and anti-subsidy probe launched by the U.S. against all-steel tires imported from China at a recent seminar on the upgrade of China’s tire industry chain.
Export Plunge to be Seen in Coming Months
Tireworld: The U.S. has launched the anti-dumping and anti-subsidy probe against all-steel tires imported from China, what the impact will be on China’s tire industry?
Xu: We can take previous anti-dumping and anti-subsidy probe against semi-steel tires from China as a reference. In 2015, China’s exports of semi-steel tires dropped 8.6% on a yearly basis. Some may think the drop is not too much, but before that, China’s tire exports grew over 20% every year.
Tireworld: Was it the main cause for poor business performance of China’s tire companies last year?
Xu: Why was that? The primary reason was fewer tire exports. The low capacity utilization of the tire industry was also because of it.
Last year, China’s exports of all-steel tires dropped 1.5% year on year. But in the first two months of this year, the decrement had expanded to 6%.
The exports will drop sharply further in the coming months.
State-owned Companies to be Main Targets
Tireworld: Would you please talk about the latest progress about the case?
Xu: The anti-dumping and anti-subsidy probe in the U.S. is mainly conducted by two authorities - International Trade Commission and the Department of Commerce.
ITC has the final say.
They have decided the mandatory respondents – Double Coin and Guizhou Tyre for anti-subsidy, and Double Coin and Prinx Chengshan for ant-dumping.
The results made the appearance very difficult.
Tireworld: Difficult for what?
Xu: Anti-subsidy probe is to investigate how much the government had subsidized the enterprises.
The American believe that Chinese government tends to subsidize state-owned firms rather than private firms. Both Dobule Coin and Guizhou Tyre are state-owned firms, which makes it very difficult for they to win the case.
Chinese Government on the Move
Tireworld: Do we have any plan to response?
Xu: The U.S. imposed 108% discriminatory tax rate on all state-owned Chinese companies after the ant-dumping and anti-subsidy probe over semi-steel tires.
CRIA submitted numerous reports to the Ministry of Commerce, expecting the Chinese government could help.
This time, MoC hire three top law firms to sue the discriminatory ruling of the U.S. against the state-owned Chinese firms.
We hope that the ruling this time will decide a reasonable tax rate on the state-owned Chinese firms, because only the taxes paid by them lower, the tax rate for the entire industry will go down.
Political Game of the U.S.
Tireworld: The U.S. launched anti-dumping and anti-subsidy probe against semi-steel tires from China last year and they launched the probe against all-steel tires from China this year. What does it mean?
Xu: The vote for final ruling over the probe against the semi-steel tires was 3:3. The three objections were from the Republicans and the three affirmatives were from the Democrats. It was completed a political issue.
We were worried about the anti-dumping and anti-subsidy probe against all-steel tires by the U.S. three years ago. And it finally happened today.
Although the value of the case was merely 1.08 billion dollars, only about a half of the value of the semi-steel tire case. But the impacts on China’s tire industry would be much greater.
Transforming to New All-steel Tire Markets Not Easy
Tireworld: Why would the anti-dumping and anti-subsidy probe against all-steel tires cause greater impacts?
Xu: Among the top 10 export destinations of China’s semi-steel tires, besides the U.S., there are European countries such as the U.K., Holland, Germany, Spain, and developed countries such as Australia and Canada.
After the anti-dumping and anti-subsidy probe by the U.S. against semi-steel tires, China could transform some of its tire exports to other markets.
However, among the top 10 export destinations of China’s all-steel tires, in addition to the U.S., the rest are the UAE, Saudi Arabia, Mexico, Pakistan and other not so developed economies.
Russia is the only European country among the top 10 export destinations of all-steel tires and its economic situation is poor.
Under such circumstances, when the U.S. launched the anti-dumping and anti-subsidy probe against China’s all-steel tires, we have nowhere to go. That’s why I’m so concerned.
