After more than a year of analysis and multiple recommendations by the Department of Commerce to enact tariffs on truck and bus tires imported from China, the U.S. International Trade Commission reversed their initial decision and decided that the U.S. tire industry was not being injured by Chinese truck and bus tires. The Department of Commerce had recommended anti-dumping duties as high as 22.57% and countervailing duties as high as 65.46%, yet the ITC chose to not enact tariffs. This already has and will continue to have a detrimental impact on the U.S. retreading industry, with as many as 50,000 direct and indirect U.S. jobs in the retreading and related industries under threat.
A $3.2 billion industry, truck tire retreading has historically represented 50% of the replacement tire market in the U.S. That percentage has decreased to 44% in 2016, indicating a 4 million unit decrease to retreading, driven by low-cost, low-quality Chinese tires. The various supplier and manufacturing industries that support the retread industry such as materials and equipment companies, tire repair manufacturers, and tire rubber recyclers have all been negatively impacted by this decline. While these low-quality Chinese tires may have similar initial costs as retreaded tires, their total cost-per-mile over the life of the tire is significantly higher than retreaded tires. Any short-term savings are completely dwarfed by long-term costs and this will drive up transportation costs for fleets and owner-operators, which will have to be passed on to consumers.
In terms of impacts to the public, this represents the potential destruction of another U.S.-based manufacturing industry supporting thousands of jobs in retreading and related industries. We will see significant increases in the amount of tires diverted to landfill or illegally dumped instead of being retreaded multiple times and responsibly recycled. This could lead to increased breeding grounds for disease-carrying mosquitoes.
Retreading also provides massive environmental benefits by conserving raw materials such as steel, rubber, carbon black and oil. In fact, it only takes 7 gallons of oil to retread a truck tire, but 22 gallons of oil is used to manufacture a new truck tire. Finally, studies have shown that retreading tires leads to significant decreases in the CO2 emissions related to tire manufacturing.
The retread industry will continue to do what we do best… delivering superior products to customers, providing the best cost-per-mile savings, and maintaining massive environmental benefits. TRIB will continue our job of educating fleets, state and local governments, and owner-operators of the economic and environmental benefits of retreaded tires. We need all of our members to continue their efforts as well.
We are exploring a number of other options for significant ways we can promote and defend the retread industry in the U.S. and we will keep you updated on our efforts.
Any questions or comments, please contact us directly at [email protected] or 703-533-7677.