Chinese OTR Imports Set High US Duties

Following two cases filed jointly last year by Iowa-based union workers and Titan Tire Corporation (and supported by Bridgestone), the US Commerce Department has placed up to 210 per cent final duties on OTR tyres imported from China. The ruling demonstrates the body’s belief that prices for the tyres were unfairly low, while David Spooner – the Assistant Commerce Secretary – stated that the exporters had “received government subsidies and sold at below the cost of production in the US.”

OTR imports totalled 15 million in 2006, a sharp increase from the 12.4 million imported in the previous year, leading to the introduction of preliminary duties to combat the alleged “dumping activities” of Chinese tyre importers. The new rates are in the majority of cases lower than the preliminaries, also varying from company to company. In the most extreme case, Xuzhou Xugong Tyre Co saw their preliminary duty dropped from 51.81 per cent to nothing. However many Chinese suppliers will face the full 200 per cent duty.

Despite this implementation of duties, Chinese manufacturers seem unlikely to be discouraged. Considering the global shortage of larger examples of OTR tyres following the boom in mining, it seems safe to say that the market will withstand the cost increases – in those cases where they have in fact increased – of the new duties, and it is unlikely that there will be a significant drop-off in Chinese exports within the sector. Whether they will retain the four-fifths proportion of all US OTR imports remains to be seen.