The U.S. Department of Commerce has determined truck and bus tires imported from China are being sold in the U.S. at dumping rates ranging from 20.87 to 22.57 percent, depending upon the company, and has instructed U.S. Customs and Border Protection to start collecting antidumping duties 90 days retroactively from Sept. 6.
The preliminary dumping decision, disclosed Aug. 29, elicited a positive response from the United Steelworkers (USW) union—which had petitioned the federal government in January to take action—and condemnation from importers and producers of Chinese truck and bus tires as well as from China's Ministry of Commerce.
USW International President Leo W. Gerard expressed the union's pleasure with the Commerce ruling, stating: “Unfair truck tire imports from China have denied our domestic industry the opportunity to share in job increases during a period of robust demand growth.”
Combined with Commerce's June 28 countervailing duty determinations, which range from 17.06 to 23.38 percent, importers of truck and bus tires from China face total import duties of 38 to 44 percent.
“We have fought back against China's predatory trade practices in nearly every part of the tire industry, including tires for passenger cars, light trucks, off-road vehicles, and now truck and bus tires,” said Stan Johnson, USW International secretary-treasurer.
However, China Manufacturers Alliance L.L.C. (CMA), exclusive distributor for Double Coin tires in the U.S., said the antidumping determination would do harm rather than good.
“We believe it's an unfortunate and misguided approach to what's going on in the industry,” said Walt Weller, senior vice president of Monrovia, Calif.-based CMA.
“The reality is that, in spite of this ruling, there is not enough truck and bus tire production in the domestic market to meet U.S. demand,” he said.
The U.S. imported 8.9 million truck and bus tires from China last year worth $1.07 billion, Commerce said, up from 6.3 million units worth $885 million in 2013. The average declared value of a Chinese truck tire last year was $120.22, vs. the average for all imports of $161.36, according to Commerce's data. If China's imports are discounted, the average value of a truck tire from all other countries was $226.
In its Aug. 29 ruling, Commerce issued a preliminary antidumping duty of 20.87 percent against Prinx Chengshan (Shandong) Tire Co. Ltd., one of the two mandatory respondents in the truck and bus tire investigation, and applied the same rate to more than 250 producers and importers who were classified as “non-selected respondents eligible for a separate rate”—that is, companies that Commerce did not select as mandatory respondents, but provided sufficient information to the agency that they qualified for a separate antidumping duty rate.
In the agency's formal statement in the Federal Register, Commerce listed 98 Chinese manufacturers under this category.
Double Coin Holdings Ltd., the other mandatory respondent, did not sufficiently respond to Commerce's questions, the agency said, and was assigned the China-wide antidumping duty rate of 22.57 percent.
The agency also said the final, cash-deposit rates for both Prinx Chengshan Tire and companies in the China-wide category would be reduced by 0.41 percentage point to offset export subsidies included in the preliminarily calculated countervailing duty rate in the concurrent countervailing duty investigation.
Recycled, retreaded and non-pneumatic tires are specifically excluded from the investigation.
In an Aug. 30 blog posting, the Alliance for American Manufacturing (AAM) cited its 2010 study showing that the Obama administration's 2009 Section 421 tariffs against Chinese passenger and light truck tire imports paid off nicely for the U.S. tire industry.
“For the six-month time period before the decision to the six-month time period afterward, U.S. tire making grew by 15 percent,” the AAM said, adding that “the fight against unfairly trade tires continues....”
There are eight plants in the U.S. with truck tire capacity: Bridgestone Americas in LaVergne and Warren County, Tenn; Continental Tire the Americas L.L.C. in Mount Vernon, Ill.; Goodyear in Danville, Va., and Topeka, Kan.; Michelin North America Inc. in Spartanburg, S.C.; Sumitomo Rubber USA L.L.C. in Tonawanda, N.Y.; and Yokohama Tire Corp. in West Point, Miss.
Combined those factories are capable of producing approximately 16.5 million tires a year. Last year U.S. plants turned out 14.8 million truck/ bus tires, according to the Rubber Manufacturers Association (RMA), up 2.1 percent from 2014.
Overall, the U.S. imported 14.5 million truck tires last year.
In terms of new U.S. capacity, Yokohama is ramping up its year-old plant in West Point, Miss., toward its 1 million unit-per-year capacity; and Continental Tire expanded its Mt. Vernon plant to 3.2 million units annually and has committed to build a $1.4 billion truck tire plant in Mississsippi, but that plant likely won't be on stream before 2019.
Depending upon how much the duties impact Chinese trade, the U.S. would need the capacity equivalent of between five and eight new truck and bus tire plants to meet demand, Mr. Weller said.
“There will still be a large volume of tires coming in from China, because no other country has the capacity to meet demand,” Mr. Weller said. “The only change is that end-users are going to pay more for them. It's as simple as that.”
Xinhua, China's official news agency, expressed in an Aug. 30 article the Chinese government's opposition to the duties.
“China's Ministry of Commerce has repeatedly urged the United States to abide by its commitment against protectionism and work with China and other members of the international community to maintain a free, open and just international trade environment,” the story said.
Commerce's final determination in the antidumping duty investigation is due Jan. 17. If its final determination is affirmative, the ITC will make a final ruling on material injury March 3.
Parties wishing to submit requests for a hearing on Commerce's duties decision have until Oct. 6 to do so.
