Chinese tires may face US tariffs

A potential new US round of anti-dumping and countervailing duties against Chinese tire exports is being regarded as a new attempt to build trade barriers after previous US tariffs on Chinese tire exports expired in 2012, Shanghai-based newspaper China Business News reported Thursday.

United Steel Workers (USW), the union of US steel workers, filed a new anti-dumping and countervailing duty trade case against Chinese passenger vehicle and light truck (PVLT) tires on Tuesday, read a filing on the USW's website.

The USW said Chinese tires are unfairly priced and subsidized by the Chinese government, leading to market share losses for the US tire makers as well as job losses for US workers, according to its filing to the US Department of Commerce and US International Trade Commission (USITC).

The China Rubber Industry Association and some tire makers held a closed door meeting Thursday but declined to reveal the meeting content by press time when contacted by the Global Times.

Bridgestone (China) Investment Co, a Shanghai-based company in the filling list of USW, told the Global Times Thursday that the company heard of the USW's new charges on Wednesday and could not comment by press time.

According to the filing, China exported PVLT tires worth $2 billion to the US in 2013, with 64 percent year-on-year growth.

Chinese PVLT tire exports to the US reached $510 million in the first quarter of 2014, up 16.6 percent year-on-year, USW said.

The USW attributed the rising exports to the US tariffs on Chinese tire exports expiring in 2012.

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 tariff in 2009, 30 percent tariff in 2010 and 25 percent tariff in 2012.

If the accusation leads to punishment tariffs as in 2009, Chinese tire makers will be under huge pressure, Su Peng, an analyst with Shandong-based industry research agency SCI, told the Global Times Thursday.

China's tire industry, which faces problems of oversupply and weak demand in the domestic market, relies heavily on overseas markets, the biggest of which is the US, according to Su.

Most Chinese tire producers only compete in the mid-level and low-end markets and earn low profits, so punitive tariffs of around 30 percent like what the US imposed on Chinese tire exports from 2009 to 2012 will be devastating to Chinese tire enterprises, he said.

After suffering from high tariffs from 2009 to 2012, many Chinese tire makers attempted to explore overseas markets such as the EU, but if the US starts the tariffs, some other overseas markets may follow the same action, according to Su.

US industry and worker associations, such as the USW, are adept at protecting themselves from international competition, Su said, noting Chinese enterprises should also unite in similar ways to guard their benefits.