Cooper Tire & Rubber Co. has raised prices on its Cooper- and Roadmaster-brand truck tires to compensate for the elevated import duties levied by the U.S. government on truck tires from China.
The increases were effective after the start of the second quarter. Cooper declined to disclose the scale of the increase.
Cooper noted in its first quarter financial results it incurred $10 million in costs related to the import duties, which amount to slightly over 42 percent on Cooper products. Cooper uses the LIFO accounting method in the U.S., which means the company experienced a negative tariff impact immediately, Cooper President Brad Hughes said.
Cooper estimates the elevated import duties will result in $50 million in costs for the full year. Mr. Hughes said management expects there'll be additional incremental prices increases this year but doesn't expect they will be sufficient to offset the full impact of the duty-related costs.Cooper sources its medium truck tires from its own Qingdao Ge Rui Da Rubber Co. Ltd. joint venture in Qingdao and from an off-take agreement with Prinx Chengshan (Shandong) Tire Co., a former Cooper joint venture.
Cooper also has signed an off-take production agreement with China's Sailun Jinyu Group Co. Ltd. covering the Roadmaster brand and is setting up a joint venture with the same company in Vietnam to build a radial truck/bus tire plant in Vietnam that could be in production by late 2020.Mr. Hughes stressed in his comments to analysts that Cooper is committed to continued growth of its TBR business, with the both the Cooper and Roadmaster brand product lines.
