On Wednesday, the U.S. International Trade Commission announced a negative determination in its final phase of anti-dumping and countervailing duties investigation against truck and bus tires from China. This means no duties will be enacted on truck and bus tires from China.
The determination was made when the ITC determined that the U.S. industry is “not materially injured or threatened with material injury by reason of imports of truck and bus tires from China that the U.S. Department of Commerce (Commerce) has determined are subsidized and sold in the United States at less than fair value.”
The decision came from a 2:3 vote by ITC officials. ITC Chairman Rhonda K. Schmidtlein and Commissioner Irving A. Williamson voted in the affirmative, while Vice Chairman David S. Johanson, Commissioner Meredith M. Broadbent and Commissioner F. Scott Kieff voted in the negative. According to the ITC, Commissioner Dean A. Pinkert did not participate.
More information on the decision will be made available in the ITC’s March 15 report.
The DOC originally found that there was in fact dumping of tires by Chinese manufacturers. Both mandatory respondents Prinx Chengshan (Shandong) Tire Co. Ltd. and Double Coin Holdings Ltd., which operates the North American subsidiary of China Manufacturers Alliance (CMA), were issued a dumping margin of 9%. Non-selected respondents also received a rate of 9% and all other producers/exporters in China that are part of the China-wide entity received a rate of 22.57%.
CVD rates for truck and bus tires imported from China were been up and down throughout the investigation due to ministerial errors. Double Coin’s final countervailing duty rate was 20.98%, Guizhou’s duty rate was 63.34%, and the rate for all other producers/exporters was 42.16%.
Imports of truck and bus tires from China were estimated at about $1.07 billion in 2015, according to U.S. official data.
Industry Responses
The decision to not hit Chinese truck and bus tires with CVD or AD duties comes with mixed feelings from those involved in the tire industry.
The United Steelworkers union, which launched the petition against TBR tires from China last year announced its disappointment with the result, stating that workers making truck and bus tires have experience tragic injury from the imports.
“The ITC Commissioners made a huge mistake,” said USW International President Leo W. Gerard. “While the Department of Commerce identified subsidies of up to more than 60% and dumping of up to almost 23%, the ITC failed to support relief for the injured workers. That simply ignores the facts and the harm that Chinese unfairly-traded exports have caused the workers.
“The size of the margins clearly indicated the serious nature of the problem, but our law separates the facts from the determination of whether injury has occurred. For too long, that has jeopardized the jobs of workers across the country that make high quality products. Our members can compete against companies, but not countries. That’s exactly what happens when it comes to competing against China,” Gerard adds.
Among the tire companies who would have been affected by the tariffs, Cooper Tire & Rubber Co. and CMA/Double Coin are pleased with the decision.
“Cooper supports free and fair trade and we are pleased with the ITC’s determination,” the tiremaker said in a statement.
CMA’s Walt Weller, senior vice president, said the company was also pleased by the result.
“We are happy with the decision and we think it’s a correct and just decision and obviously the committee believes there was no material injury nor affect of injury to the domestic tire industry and manufacturers,” Weller told Tire Review. “…The industry has made record profits for the last decade, profits that have rivaled internet company profits and in addition to that, if the tariffs were implemented the only people to suffer would be the end-user because there is no additional capacity available in the United States to come anywhere near being able to supply the demand in the U.S.”
In the last few years there have been no new truck tire plants built in the U.S. from domestic manufacturers (Goodyear Tire & Rubber Co. or Cooper Tire & Rubber Co.). However, Japan’s Yokohama Tire Corp. started production at its truck tire facility in Mississippi in 2016 and Continental Tire the Americas (a subsidiary of Germany’s Continental AG) plans to start production at its truck tire facility in Mississippi in 2018.
Chinese officials are also obviously in support of the outcome. Wang Hejun, the head of the trade remedies and investigations division at China’s Commerce Ministry, was vocal earlier in the year stating the original determinations was “extremely unfair” and could hurt the country’s interests.
“China appreciates that the ITC could make a fair ruling that respects the objective facts,” Wang said in a statement on the ministry’s website.
The USW, however, has no plans to back down on its stance that truck and bus tires imported from China are hurting U.S. workers. In a statement, the organization said it is time for the government to step in.
“We will look to the Congress and the new administration to determine whether other steps can be taken to save these vital family-supportive jobs,” said USW International Secretary-Treasurer Stan Johnson.
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