The tire industry is again facing a petition placed to enact tariffs against imported tires manufactured by factories located in China. The Department of Commerce (DOC) has begun its anti-dumping (AD) and countervailing duty (CVD) investigations of imports of truck and bus tires from China. The government’s investigation of truck and bus tires was initiated by a Jan. 29 petition filed by the United Steelworkers (USW), who allege the Chinese government is unfairly promoting tire manufacturing and exports to the U.S. If the ITC determines that there is a reasonable indication that imports of truck and bus tires from China materially injure, or threaten material injury to, the domestic truck and bus tire industry, the investigations will continue.
Is it possible that this action is a bit of “smoke and mirrors” or, could it be based on clouded thinking arising from ignorance? In the trucking industry there exists the concept of “cost per mile” as it relates to the price/cost of tires. Hence, the retreading industry comes into play. A good part of what is paid for on these subject tires is for materials and engineering that has value that goes beyond the wearing of the original tread life, not to mention the original tread life itself. For many end users this consideration drives the decision on what level/type of product is purchased. Of course, there are end users/fleets that have applications and conditions that are not conducive to the cost-per-mile consideration. EG, fleets that have high incidences of tire theft, surface applications that cause damage to their tire investment such as rock, stone, high curbing damage, chemical exposure damage, poor air pressure and alignment maintenance, which have the potential to shorten casing life.
Thus, we have end users whom prefer to not purchase first and/or second tier tire products. And, they choose the option of third tier product as well as bias construction product for some applications. Most of the third tier radial truck and bus tires are not made in the U.S. in addition to none of the bias product being made in the United States.
What we have here is that the subject petition is the lumping together of considerations in this case of not being apples to apples. And, the resulting of parts of the trucking industry (and, some Teamster Union member owners/owners operators) with the potential of getting the short end of the stick if the proposed tariffs are enacted. Of course, the results of which will be the increased cost ultimately being passed on to the U.S. consumer (and, government agencies with trucks and buses) in the form of increased cost.
Is this petition really saying that we have to rid the U.S. of sales of Chevys because they are hurting the sales of Cadillacs? Not to be taken the wrong way on this…there are Chinese truck and bus products that fair very well when it comes to cost per mile relating to original tread and casing/retread life. In fact, some present themselves in performance capabilities in comparison to first and second tier products made in the United States, Europe, Korea, Canada and Japan. It is a fact that Goodyear, Michelin, Bridgestone, Yokohama, Pirelli, Hankook and Kumho all have truck and bus tire production facilities based in China producing very viable retreadable products counter to part of TRIBs (retread industry organization) recent argument on Chinese tire quality recently used by the USW used as fodder in support of their petition. Certainly, those manufactures would not be producing subpar products to ship into other world markets to include the U.S. would they? And, where was the USW years back when Japanese and Korean made truck and bus products were profiling under the same circumstances playing out then?
To quote Warren Buffett: “Price is what you pay; value is what you get.” And, I am reminded of the words on John Wayne’s tombstone: “Tomorrow is the most important thing in life. Comes into us at midnight very clean. It’s perfect when it arrives and puts itself in our hands. It hopes we’ve learned something from yesterday.”
J.D. Guerrieri
Tire Industry Consultant
