Mixed feelings about Russia? – Titan International sends letter to Biden

In its most recent quarterly report, US-based off-highway tyre manufacturer Titan International, Inc. reports owning 64.3 per cent of Russian tyre maker Voltyre-Prom, with the Russian Direct Investment Fund (RDIF) the remaining shareholder. Yet this connection with Russia and its government sovereign wealth fund hasn’t stopped Titan raising its voice against indirect imports of Russian petroleum products into the USA. Together with the United Steelworkers (USW) union, Titan has even sent a letter to Joe Biden.

USW and Titan International, parent company of the Volgograd-based agricultural and industrial tyre manufacturer, today “called for restrictions on downstream products made from Russian petroleum inputs.” Their concerns particularly centre upon off-the-road (OTR) tyres imported from India into the USA.

Paul Reitz, president and chief executive officer of Titan International, states that “imports of Indian OTR tyres increased by close to 38 per cent in 2022 compared to 2021” and he points the finger at India for being “not among the nations to ban imports of Russian oil products” including carbon black. The head of Voltyre-Prom’s majority shareholder thus stresses that it is vital to US industry that “we intensify our efforts to bring light to and close loopholes in the issued sanctions to Russia.”

Titan and the USW sent the following joint letter to the White House, signed by Paul Reitz and Thomas M. Conway, USW International president:

President Joseph R. Biden, Jr.
The White House
1600 Pennsylvania Avenue, N.W.
Washington, DC 20500

Dear Mr. President,

We write on behalf of the domestic industry and its workers producing off-the-road tires (OTR tires) in the United States to alert you to serious concerns about imports of OTR tires from India that are undermining the integrity of our country’s ban on imports of petroleum products from the Russian Federation. In order for these vitally important sanctions on Russian oil exports to have their intended effect, we urge you to take action to ensure that downstream products made in third countries from Russian petroleum products – such as OTR tires from India – are also subject to import restrictions.

As background, Titan International, Inc. is a leading manufacturer of OTR tires and wheels, which are used on a wide variety of off-the-road equipment, including in agriculture, mining, construction, and industrial applications. Titan operates six manufacturing facilities in the United States, in Des Moines, IA, Freeport, IL, Quincy, IL, Bryan, OH, Union City, TN, and Saltville, VA. Titan’s workers are represented by the United Steelworkers union (USW), which, as you are well aware, is the largest industrial union in North America. We believe a thriving domestic OTR tire industry is vital to our ability to equip America’s farmers and miners, as well as to support much-needed infrastructure construction and industrial applications. During the pandemic, our industry was deemed an essential industry, and Titan made significant investments to remain in operation and keep its workers safe so it could continue to serve its customers.

Unfortunately, Titan and the USW have experienced firsthand the injury that unfair foreign trade practices cause to domestic producers and workers. Titan and the USW have fought together for fair trade for many years, and we currently are defending antidumping and countervailing duty orders on OTR tires from India that were imposed in 2017.

In the last year, we have faced a new threat from Indian producers: their ability to leverage access to cheap, sanctioned Russian petroleum products to drive down tire prices and propel injurious exports to the United States. One of the key inputs to the production of OTR tires is carbon black, which is produced by combusting petroleum products. Thus, a country that is able to access plentiful supplies of low-priced oil will have a significant advantage in the market for OTR tires.

While we commend the Administration for bringing many of our allies together to implement bans on imports of Russian oil products similar to the ban we imposed in March of 2022 in response to Russian aggression in Ukraine, we note that India has not joined these efforts. To the contrary, India, the third largest oil importer in the world, has surged into one of Russia’s top export destinations for petroleum products.1 In 2022, Russia replaced Iraq as India’s top source of oil imports, accounting for a quarter of India’s total oil imports.2 By December of 2022, India was importing more than a million barrels a day from Russia, more than any other country (including China).3 Indeed, India’s oil imports from Russia in December of 2022 were 33 times higher than they had been a year earlier.4

During the same period in which India has ramped up imports of cheap Russian oil, Indian exports of OTR tires to the United States have grown rapidly. Since the U.S. ban was imposed in March of 2022, average monthly U.S. imports of OTR tires from India have jumped by 37.6 percent compared to the same period in 2021.5 In short, access to plentiful quantities of low-priced Russian oil has artificially lowered the costs of production for our Indian competitors and spurred a harmful flood of OTR tire imports. In our view, this not only directly harms U.S. producers and workers in an essential domestic industry – India’s practices also undermine our national security. India’s Russian oil imports weaken the effectiveness of the oil import ban and help fund Russia’s war against Ukraine.

For all of these reasons, we respectfully request that your Administration consider imposing import restrictions on downstream products made in third countries with Russian petroleum inputs. These restrictions will help level the playing field for domestic producers of such products and their workers, such as Titan and the USW. More importantly, such restrictions will strengthen the integrity of existing sanctions on Russia and ensure the U.S. does not become an unwitting target for oil-dependent foreign goods made in countries that refuse to join the United States in banning Russian oil exports.

We would be pleased to provide further information to your staff and meet with them at their convenience to discuss these important issues.