Even though it had until Aug. 1 to thoroughly investigate the situation and render a decision, the U.S. International Trade Commission yesterday voted 6-0 to advance the United Steelworkers petition for anti-dumping and countervailing duties on consumer tires imported from China.
Chinese tiremakers, meanwhile, are planning for the worst even as they are pushing the Chinese government to redouble its efforts on their behalf.
It was just seven days earlier that the U.S. Commerce Department granted the USW standing in the case, allowing it to proceed. The USW first filed its petition with the Commerce Department on June 3.
It was a surprisingly swift decision by the ITC, especially since unlike its previous success in seeking to punish Chinese tire producers and importers, the USW has little or no political backing. Still, tiremakers, particularly those that import significant numbers of consumer tires from their own plants in China or from Chinese manufacturers on contract have been publicly silent about the situation.
Going forward, should the ITC favor the union’s position and rule that imported China-produced consumer tires “materially injure” the U.S. tire industry, the Commerce Department will make its preliminary determination on countervailing duties by Sept. 17 and on dumping margins by Dec. 1.
A final decision on countervailing duties is due by Dec. 1, and on antidumping duties by Feb. 17, 2015. Final decisions by the ITC are not scheduled to come until Jan. 15, 2015, on countervailing duties and March 31, 2015, on antidumping duties.
“President Obama in 2009 responded to a case filed by the USW and provided relief under a different section of our trade laws to stop a flood of these tires from China,” said USW International president Leo Gerard, in a statement yesterday. “That action helped stabilize the industry for the three years that relief was in place. But as soon as the safeguard ended, China once again targeted the U.S. market, attacking the jobs of U.S. workers. Massive dumping and subsidization of tires began to capture market share here in the U.S.”
Reflecting also on the three-year administrative tariff, USW International Secretary-Treasurer Stan Johnson said, “While relief was in place, billions of dollars in investments were made by firms producing tires in the U.S. in new plant and equipment. But, China’s targeting of our industry has injured our members. They work hard and play by the rules and all they want is a fair chance to compete. They deserve to have our nation’s trade laws aggressively and faithfully enforced.”
“The USW plays by the rules, but when other countries thumb their noses at fair play and cheat, our primary recourse is to pursue lengthy, expensive and sometimes uncertain processes to restore fairness and save our jobs,” claimed Tom Conway, USW International vice president. “In essence, the only way we win is by losing: We have to lose jobs before we can act, and by the time relief is provided, if it even is, we’re faced with digging out of a hole.”
Meanwhile, Gasgoo.com News Service reports that with the prospect of facing another additional tariff, the China Rubber Industry Association “has begun mobilizing material suppliers and product manufacturers in the Chinese tire industry,” and will “strongly urge the Chinese government to take the appropriate actions.”
While it is unclear where it obtained its information, Gasgoo.com reported: “If the U.S. government decides to implement the taxes (added tariff), it will be the largest protectionist policy the Chinese tire industry has had to deal with. The proposed policies will places tariffs of 60.15% and 25.73% on Chinese tires, making it impossible for Chinese tires exports to the U.S. to be competitive. Such a policy could potentially affect the jobs of nearly one million Chinese workers.”
Hangzhou Zhongce Rubber Co. CEO Shen Jinrong claimed that “many” U.S. companies have already canceled orders, “afraid of having to deal with the high taxes.”
Shen said, “The CRIA has already organized several discussions. Chinese tire enterprises are unanimous in their opinions and actions, and they all believe that this sort of policy is a gross example of protectionism. We will negotiate with the relevant American departments, as well as use evidence to demonstrate that these policies are not logical.”