ITC’s Negative Determination Is A Huge Triumph For The Chinese Tire Manufacturers

According to the Reuters, the U.S. International Trade Commission (ITC) said in a statement that subsidized bus and truck tires imported from China had not damaged the U.S. industry, and as a result it would not issue anti-dumping and countervailing duty orders on the products. The ITC’s negative determination means no more anti-dumping or countervailing duties (AD/CVD) will be collected on imported Chinese truck and bus tires.

More tire companies are sourcing truck tires from China for the North American market than ever before.”The barriers of non-acceptance for foreign-made products (in America) are gone,” says Dan Hunter, president of Sutong China Tire Resources, a U.S.-based firm that sources Chinese-made tires for American tire dealers. That applies to medium truck tires. Wang Hejun, the head of the trade remedies and investigations division at China’s Commerce Ministry, also welcomed the decision. “China appreciates that the ITC could make a fair ruling that respects the objective facts,” Wang said in a statement.

From the very beginning, the tire case was feeble as the objections related to the Chinese-made tires were raised by the United Steel Workers rather than the tire companies themselves. Not a single domestic U.S. tire companies signed their names in the AD/CVD petition cases. It has been speculated that Steel Workers filed this and other tire AD/CVD cases just because to get wage concessions from the U.S. tire industry management. It represents workers at domestic plants accounting for only 40 percent of total U.S. tire production capacity. None of the nine domestic tire producers – i.e., the firms that account for all domestic tire production – support the AD/CVD petitions.

The Antidumping (AD) and Countervailing Duty (CVD) laws are portrayed by the protectionism lobby as tools needed to help U.S. producers “level the playing field” with foreign producers, who exploit unfair practices to establish dominance in the U.S. market. In reality, the laws have become commercial weapons used primarily by American companies and their workers to secure advantages over other American companies and their workers.

The US tire industry is forecasted to grow at a CAGR of more than 5% in terms of volume until 2021. The report also forebodes that Goodyear will continue to be the market leader It is anticipated that new tire technology will be adapted by major manufacturers and fuel-efficient tires will be dominating the market. As a result, its dominance is expected to continue throughout the forecast period as well. Meanwhile, in the U.S., manufacturers believe price/mix could be neutral next year suggesting some stability on the pricing front and the raw material environment continues to look favorable, potentially leading to a positive price/mix versus raw material spread.

Not issuing anti-dumping and countervailing duty orders on the Chinese tires by the ITC is a huge triumph for the Chinese tire manufacturers and their U.S. importers. The decision is historic as it is not influenced by the protectionist trade policy.

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