Retreaders and tire workers are pleased with a federal court decision partly remanding the International Trade Commission's February 2017 decision not to issue countervailing and anti-dumping duties against Chinese truck and bus tire imports.
The U.S. Court of International Trade issued its slip opinion Nov. 1, holding that the ITC's negative determinations on the price effects and threat posed by Chinese imports were not supported by substantial evidence.
However, the court upheld the commission's negative determinations on adverse impact and conditions of competition, including substitutability, tiers and relative importance of price.
The court ordered the ITC to file its reconsideration of the Chinese truck and bus tire decision by Jan. 4.
The commission also must file the administrative record on the remand by Jan. 18. Parties to the decision must file comments by Feb. 4, and replies to comments are due March 6.
The United Steelworkers union filed suit with the CIT in April 2017, alleging that the ITC decision was unsupported by substantial evidence and not in accordance with the law.
The USW petitioned the ITC in January 2016, seeking relief under Sections 701 and 731 of the Trade Act. Chinese underselling and government subsidies, the union said, were causing material injury to U.S. truck and bus tire manufacturers.
The ITC made a preliminary determination of material injury in March 2016, and in January 2017 the Commerce Department issued substantial final antidumping and countervailing duties against the Chinese imports, though it later lowered some of the countervailing duties.However, the full commission voted 3-2 against a final determination of material injury.
In her Nov. 1 decision, CIT Judge Jennifer Choe-Groves wrote that the ITC was correct in holding that there is a high degree of interchangeability between U.S. and Chinese truck and bus tires, and that there is broad recognition of a tiered market in that sector.
Judge Choe-Groves also found that the ITC properly considered the domestic tire industry's performance within the business cycle and conditions of competition, despite the USW's allegations otherwise.
However, Judge Choe-Groves found the ITC's reasoning erroneous as to underselling and price suppression. "The commission failed to give further details, did not reference any statistics, and neglected to explain how its observation supported its conclusion with regard to underselling," she wrote.
Judge Choe-Groves also found "a clear discrepancy" between the ITC's negative determination on the threat posed by Chinese imports and the Commerce Department's finding of 15 countervailing subsidy programs for truck and bus tires produced in China.
USW Secretary-Treasurer Stan Johnson, who oversees the union's tire sector, said the union was pleased with the court's decision.
"We are hopeful that upon further review, the commission will issue a favorable determination that works to protect the jobs of our members and all workers adversely affected by China's unfair trade practices."
Retread Instead, a coalition of retread industry supporters, also was happy with the decision. The U.S. retread industry has long argued that the influx of low-priced Chinese truck tires has unfairly undercut domestic retreaders and threatens the survival of the industry.
"Effective enforcement of U.S. trade remedy laws is very important to the U.S. retread industry," Retread Instead said. "Retreading commercial truck tires in the U.S. is a $3 billion industry that has significant economic and environmental benefits to our nation."Retreading supports more than 100,000 U.S. jobs, all of which are threatened by the sale of Chinese tires in the U.S. below fair market value, the organization said.
China exported 6.49 million truck and bus tires to the U.S. in 2017, according to Commerce Department figures. This was down 15 percent from 2016, but still represented 44.4 percent of all truck and bus tires sold in the U.S.
Commerce also said the average declared Customs value of a Chinese truck/bus tire imported in 2017 was $109.59, which is 28.4 percent below the average value for all imports. By contrast, the average value of a truck/bus tire imported from Canada was $263.95.
Walter Weller, vice president of China Manufacturers Alliance L.L.C./Double Coin Tires, said the CIT decision was no surprise.
"We continue to believe that the ITC's original decision will stand, but we'll see what they have to say," Weller said.
All the major tire manufacturers have announced substantial price increases on truck and bus tires, and can't currently satisfy demand for their products, according to Weller.
"The idea that prices are being held down by Chinese imports is not supported by the facts," he said.
A spokeswoman for Cooper Tire & Rubber Co., which intervened in the case on the ITC's behalf, said it was premature for Cooper to comment on the decision, except to reaffirm its support of free and fair trade.
"Our goal is to keep our company globally competitive and help our customers remain competitive as well," she said.
