Despite Tariff, China's Sailun Continues U.S. Bid

In a bid to find out what how one of the nation’s more modern tire manufacturers has been fairing since the U.S.’s introduction of a 35% added tariff, Tyres & Accessories interviewed Chinese tiremaker Sailun Tire.

Surprisingly, the company plans to continue selling a similar number of tires into the U.S., despite the hefty new tax on consumer tires.

T&A: What is Sailun’s position on the U.S.’s recent decision to impose 35% import tariffs on Chinese consumer tires?

Sailun: We strongly disagree with the 35% tariff. We think this verdict is mainly decided by politics instead of trade. Our American distributors also attended T421 meeting and are very upset about the verdict.

T&A: What about the reasons used to justify it?

Sailun: T421 came to a very quick verdict. This is very hard for a Chinese factory to adjust the allocation within only two months. The American tire market still has big demand. Sailun will work with American distributors to resolve current issues together.

T&A: And the arguments against it?

Sailun: It caused huge difficulties to the Chinese tire industry. The U.S. tire industry dropped out of the economy tire segment and used Chinese tires instead. Chinese tires are not competing with American tires. Even American tire manufacturers are against the tariff. This will increase the tire prices, which will add burden to American consumers. And it will cost thousands of American tire wholesalers and Chinese tire industry workers their jobs. No one truly benefits from this decision.

T&A: Was the decision a surprise to Sailun?

Sailun: Yes, this completely surprised Sailun. A 35% tariff is completely unreasonable. Chinese tire prices don’t have such a big gap with American tires.

T&A: What is Sailun’s current annual output in China? How is this now likely to change?

Sailun: Sailun sells 2 million TBR and a certain quantity of PCR in the domestic market. The domestic market is increasing dramatically. We will expand domestic quantity to 2 million TBR and 4 million PCR.

T&A: Are your operations running at full capacity?

Sailun: Yes, operations are running at full capacity at the moment.

T&A: How many of these tires are sold on the U.S. and on the European markets respectively?

Sailun: Prior to the ITC ruling, Sailun exported 180,000 PCR and 35,000 TBR per month into the American market. And the company exports 40,000 PCR and 5,000 TBR per month in European market.

T&A: How many tires remain in the domestic Chinese tire market?

Sailun: The TBR section of the domestic market takes 70%. And prior to the tariff ruling, Sailun exported most of its PCR. But we will expand domestic market and let domestic market keep 40% of PCR quantity in future.

T&A: Will you continue to ship to the U.S.? If so, how many units?

Sailun: Yes, we will continue to ship to the U.S. At this critical time, Sailun will continue to support its customers and meet market demand. U.S. export units will be the same as before, around 2 million per year.

T&A: Will the taxes affect the distribution side on the European markets now that there will be changes with the international network of factories?

Sailun: Current Sailun capacity can’t meet market demand. We will keep the current European capacity. As the American market price increases, international tire producers will supply more tires to America. There might be shortage for European market in future months.

Sailun representatives told T&A that the tariff is not acceptable because the “U.S. put politics into trading issue.” Their point of view is that this is “not fair to Chinese factories which are working so hard to make a living and supply low cost and high quality products to U.S. market.”

However, they are pragmatic about the situation: “The tariff is reality. Sailun believes these difficulties will generate more opportunities for Sailun, which is always focused on quality, technology and market. We believe free trade is still the future trend. This tariff is just the short term issue. This cannot change the world-wide market structure. Free trade will allocate world resources in the most reasonable way. The market will decide how to sell tires, not politics.”

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