A tire plant of Shanghai-based Double Coin Holdings in Southwest China's Chongqing Municipality. Photo: IC

Tire trade dispute Source: Compiled by GT Graphics: GT

 

The US Department of Commerce announced Tuesday (US time) it would begin an anti-dumping and countervailing investigation on Chinese tire imports, which may lead to possible penalty tariffs on those tires.

The government is proceeding with the trade case petition filed on June 3 by United Steelworkers (USW) against imports from ­China of passenger vehicle and light truck tires (PVLT), Leo W. Gerard, international president of USW, said in a statement released on the website of USW.

The next step is the US International Trade Commission (USITC) preliminary injury determination, which is scheduled to vote on the trade cases on Tuesday, the statement said.

After the USW filed the trade case, the China Rubber Industry Association (CRIA) said in a statement posted on its website on June 16 that it is firmly against the filing and it will demand the Chinese government launch counter­measures if the case is proceeded.

CRIA said on its website that it is organizing Chinese enterprises to prepare a defense that Chinese tire exports did not damage the US tire industry.

China's Ministry of Commerce could not be reached for comment by press time.

The World Trade Organization ruled on July 7 that the US had acted inconsistently with WTO rules with regard to its countervailing and anti-dumping measures on certain products from China, ranging from photovoltaic cells to tubular goods, media reports said.

"China's economic growth during the world economy recovery is outstanding, therefore sometimes it is unreasonably blamed for taking jobs from other countries," Su Peng, an analyst with Shangdong-based industry research agency SCI, told the Global Times Wednesday.

However, China mainly exports middle- and low-end tires to overseas markets and these products are not competing with the high-end tires manufactured in the US, Su said.

Su noted that the statistics also showed that during the period  from 2009 to 2012 when Chinese tire exports were charged high tariffs in the US, tire makers in the US did not win a greater share in their domestic market.

Back in April 2009, the USW filed a similar complaint with the USITC and the USITC's investigation resulted in punitive tariffs on tire imports from China for a three-year period - 35 percent special tariff in 2009, 30 percent special tariff in 2010 and 25 percent tariff in 2012.

In September 2009, President Obama approved a special tariff on  tires imported from China.

US tire makers took a 56 percent share in their domestic market in 2012 but the figure dropped to 45 percent so far, while the share of Chinese producers in the US market jumped from 8 percent in 2012 to 12 percent so far, auto news portal cnautonews.com reported on July 1. 

If the US imposes punitive tariffs on China tire exports, Chinese enterprises are not the only victims because about half of the enterprises that would be impacted by the tariff are joint ventures in China, according to Su.

But foreign companies can resort to their factories outside of the Chinese market while Chinese companies will suffer the most, he noted.

If the investigation finally leads to 60.15 percent and 25.73 percent punitive tariffs, on anti-dumping and countervailing respectively, as the USW's filing required, it will be impossible for Chinese PVLTs to be exported to the US, according to CRIA.

Once the investigation is launched, Chinese tire makers should cooperate with the investigation and hold on to all evidence that shows they are not involved in dumping or unfair subsidies, He Weiwen, co-director of the China-US-EU Study Center under the China Association of International Trade, told the Global Times Wednesday.

Industry associations also should try to make alliances with their export partners in the US and actively participate in the investigation, he said.