TGI Releases Statement on ITC Ruling

Tire Group International (TGI) has released a statement outlining a USA based exporter’s point of view” towards the International Trade Commission (ITC) ruling on imported Chinese passenger car and light commercial vehicle tyres. In this statement, TGI indicates it will continue to fight the ITC ruling and says that, after meeting with several state representatives, senators, and following phone conversations with the assistant secretary of Import Administration, the company is able to “shed light on the effect this ruling will have on re-exporters” such as itself.

“Companies such as TGI have already been adversely affected early this year with the ITC’s ruling to impose anti-dumping and countervailing duties on Chinese OTR, Agriculture and Industrial tyres,” the company notes. “This, along with not providing a duty drawback procedure to allow exporters to claim these duties, has put USA tyre exporters at a competitive disadvantage with companies whose operations are outside of the USA. TGI’s OTR, Agriculture and Industrial business alone is down over 65 per cent year to date, forcing numerous layoffs in warehouse and sales personnel.” TGI says the ITC petition will further weaken its position.

According to TGI, the ITC’s petition is “largely flawed in its premises and logic”. The exporter presents the following reasons, reprinted directly from a TGI statement, as a basis for this belief:

1. The petition attributes reduction in domestic tyre production/sales and closure of domestic tyre factories to increases in the number of tyres imported from China. The petition ignores that a major market of the domestic manufactures is in original equipment for the automobile industry. As everyone knows, that industry has suffered incredible shrinkage in the past few years with two of the major auto manufacturers filing for bankruptcy. The auto manufactures have drastically reduced equipment (including tyres) purchases, have temporarily closed factories and reduced production of automobiles. Their need for tyres has decreased substantially. These automobile manufactures only use a small number of tyres imported from China as OEM equipment. Regardless of the amount of tyres imported from China, the domestic tyre manufactures would have experienced very significant reductions in sales, which would clearly result in reduced labour needs.

2. The petition claims a loss of approximately 10 per cent in domestic, union jobs associated with domestic manufactures. The petition ignores that unemployment in all sectors has climbed to 8+ per cent and is high as 10 per cent in some states.

3. In discussing domestic tyre factory closures, the petition does not differentiate between factories that manufactured industrial tyres as opposed to consumer tyres.

4. Likewise, the petition does not take into consideration that some factories would have closed regardless of the number of imported tyres due to age and antiquity or increased efficiency of other factories owned by those companies that manufacture tyres domestically.

5. Similarly, the petition ignores the global decline in demand for tyres. On April 30, 2009 TireBusiness.com reported that Goodyear reported first quarter losses. Those losses were not attributed to importation of Chinese tyres but rather a 20 per cent decline in tyre unit volume due to     “significantly lower global industry demand”.

6. The petition fails to recognise that the number of domestically manufactured tyres is 3.5 times greater than the number of Chinese imports.

7. The petition makes the bold statement that if Chinese tyre imports are restricted, jobs in the tyre manufacturing industry will return to US. Given the global economy and that many tyre factories exist in India, Mexico, Thailand, and Vietnam where labour costs are considerably lower than they are in the US, the likelihood of jobs retuning here is slight. Buyers will seek more low cost supply from producers in these other countries.

8. The petition fails to consider the adverse impact on jobs in businesses which rely on tyres imported from China. For example, importers, exporters, distributors, dealers, custom brokers, NVOs and dock workers will all be adversely affected if the remedy is granted. Many of these businesses are already suffering due to the imposition of anti-dumping duties on OTR, Agriculture and Industrial tyres manufactured in China.

9. A tariff on Chinese manufactured tyres would result in significant higher cost for consumer tyres in the US. This would be detrimental to the US economy. As the petition demonstrates, domestically manufactured tyres tend to be more costly. In this struggling economy, such a result would be ill conceived.

To further demonstrate how illogical the petition is, it even calls for all light truck bias and ST trailer bias tyres, which are practically no longer produced in the USA, to be subject to the tariff. TGI will continue to make its voice heard and we encourage all our colleagues in the industry to do the same.