Chinese truck tyre tariffs to persist in UK?

The European Court of Justice’s (ECJ) judgement that the European Union’s anti-dumping and anti-subsidy tariffs should be annulled has been welcomed by many of those responsible for distributing these products across the continent. Yet for importers of these products in post-Brexit United Kingdom, the truck tyre tariffs introduced by the European Commission appear to be persisting. Speaking to representatives of the Imported Tyre Manufacturers’ Association (ITMA), the association whose members are most directly concerned with these tariffs, Tyres & Accessories now understands that the UK’s Trade Remedies Authority (TRA) does not intend to annul the tariffs since the ECJ’s judgement does not apply legally in the UK, even considering the view that the tariffs were implemented improperly under EC law. It follows that the status quo on these tariffs will be maintained, at least until the TRA reaches tyres in its review of the lengthy list of trade remedies inherited from the UK’s time as a member of the EU. Until such a review takes place, the tariffs will continue to apply until at least November 2023, and UK importers are effectively blocked from joining European colleagues in ending and recouping duties found to be improperly implemented.

The assumption that the ECJ judgement would mean the annulment of the tariffs in the UK was punctured on 6 June, when ITMA received the following communication from the TRA: “The Trade Remedies Authority (TRA)… will start a transition review before the measure expires on 12 November 2023. Once a transition review begins, there will be an opportunity for interested parties to provide information to the TRA.

“We are aware of the recent CJEU judgment; however, this judgment does not apply to the UK.”

While light on detail and therefore inviting further questions, this statement suggests that the TRA currently intends to allow the tariffs to apply until they reach their expiry date. One aspect that remains unclear is whether Northern Ireland remains obligated to follow the EU’s annulment or the TRA’s current continuity approach due to its special status conferred within the 2020 withdrawal agreement. T&A has written to the TRA for further comment.

ITMA view

Alfred Graham, ITMA president, told T&A that the association had been seeking clarity on the situation in the UK since the ECJ’s 4 May ruling. The TRA assumed responsibility for the assessment, implementation and withdrawal of duties enforced in the country after the UK completed its exit from the EU on 31 December 2020. The authority is now in possession of a lengthy list of existing tariffs to assess on the UK’s new trading terms, on which the tyres appear. It is understood that the target timeframe for completing the assessment is the final quarter of 2022, yet the TRA’s own 6 June statement and an uncertain political climate cast doubt on whether these tariffs will be reassessed before their inbuilt expiry date.

However the TRA has reached its current position on the tariffs, the implications for Chinese truck tyre importers in the UK are clearly serious, as was clear when T&A spoke to Triangle Tyre’s UK & Ireland sales director, Steve Eke. Eke’s former company TYM International specialised in importing commercial vehicle tyres from China and had a strong partnership with Triangle in particular. The company ceased trading due to the combination of business pressures caused by the EU truck tyre tariffs and the Covid-19 pandemic.

According to Eke, the annulment of the tariffs on the same lines as those suggested by the ECJ ruling would mean around £750,000 could be recouped on behalf of TYM, in addition to the obvious benefits to Triangle and others on future UK truck tyre sales. Extrapolate this situation across UK imports of products attracting these tariffs, and the decision could be worth an amount into eight figures. Eke is now investigating how the ongoing tariffs might be challenged legally in the UK, potentially with reference to the successful case brought by the China Rubber Industry Association (CRIA) and China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (CCCMC) against the European Commission.

However it plays out over the next 17 months, the current UK tariff situation demonstrates a peculiar irony about Brexit relating to EU regulations signed into UK law: the UK is currently maintaining a tariff regime on Chinese tyres introduced by the European Union because it will not defer to a European court judgement against an EU regulation.