Sailun Tire Continued US Exports Despite ITC Ruling

In a bid to find out what how one of the nation’s more modern tyre manufacturers has been fairing since the introduction of the ITC tariff, Tyres & Accessories initiated the following interview with Chinese tyre maker Sailun Tire. Surprisingly, T&A learnt that the company planned to continue selling a similar number of tyres into the US, despite the hefty new taxes, which they refer to as T421. Our first question was what is Sailun’s position on the US’s recent decision to impose 35 per cent import tariffs on Chinese tyres?

Sailun: We strongly disagree with the 35 per cent tariffs. We think this verdict is mainly decided by politics instead of trade. Our American distributors also attended T421 meeting and are very upset about the verdict.

T&A: What about the reasons used justify it?

Sailun: T421 came to a very quick verdict. This is very hard for Chinese factory to adjust the allocation within only two months. The American tyre market still has big demand. Sailun will work with American distributors to resolve current issues together.

T&A: And the arguments against it?

Sailun: T421 caused huge difficulties to the Chinese tyre industry. The US tyre industry dropped out of the economic tyre segment and used Chinese tyres instead. Chinese tyres are not competing with American tyres. Even American tyre manufacturers are against T421. This will increase the tyre prices which will add burden to American consumers. And it will cost thousands of American tyre wholesalers and Chinese tyre industry workers their jobs. No one truly benefits from this decision.

T&A: Was the decision a surprise Sailun?

Sailun: Yes, this completely surprised Sailun. A 35 per cent tariff is completely unreasonable. Chinese tyre prices don’t have such big gap with American tyres.

T&A: What is Sailun’s current annual output in China? How is this now likely to change?

Sailun: Sailun sells two million TBR and a certain quantity of PCR in the domestic market. The domestic market is increasing dramatically. We will expand domestic quantity to 2 million TBR and 4 million PCR.

T&A: Are your operations running at full capacity?

Sailun: Yes, operations are running at full capacity at the moment.

T&A: How many of these tyres are sold on the US and on the European markets respectively?

Sailun: [Prior to the ITC ruling] Sailun exported 180,000 PCR and 35,000 TBR per month into the American market. And company exports 40,000 PCR and 5,000 TBR per month in European market.

T&A: How many tyres remain in the domestic Chinese tyre market?

Sailun: The TBR section of the domestic market takes 70 per cent. And [prior to the ITC ruling], Sailun exported most of its PCR. But we will expand domestic market and let domestic market keep 40 per cent of PCR quantity in future.

T&A: Will you continue to ship to the US? If so how many units?

Sailun: Yes, we will continue to ship to the US. At this critical time, Sailun will continue to support its customers and meet market demand. US export units will be the same as before, around 2 million/year.

T&A: Will the taxes affect the distribution side on the European markets now that there will be changes with the international network of factories?

Sailun: Current Sailun capacity can’t meet market demand. We will keep the current European capacity. As the American market price increases, international tyre producers will supply more tyres to America. There might be shortage for European market in future months.

Sailun representatives told T&A that while T421 is not acceptable because “USA put politics into trading issue.” Their point of view is that this is “not fair to Chinese factories which are working so hard to make a living and supply low cost and high quality products to US market.” However, they are pragmatic about the situation: “T421 is reality. Sailun believes these difficulties will generate more opportunities for Sailun which is always focused on quality, technology and market,” concluding: “We believe free trade is still the future trend. T421 is just the short term issue. This cannot change the world wide market structure. Free trade will allocate world resources in the most reasonable way. The market will decide how to sell tyres, not politics.”