Commercial Business

DOC Error Forces Higher Tariffs on all Truck Tires From China

Posted on October 12, 2016

The U.S. Department of Commerce (DOC) has admitted to a miscalculation in its preliminary anti-dumping tariff rate for truck and bus tires imported from China. As a result, the rates for every manufacturer and importer are increasing to 30.36%, which is nearly 10 points higher than the initial calculation.

The DOC has recalculated its preliminary anti-dumping tariff rate to account for two errors that affected the initial figure.
The DOC has recalculated its preliminary anti-dumping tariff rate to account for two errors that affected the initial figure.
The change stems from two fine details that were used to establish the rate for Prinx Chengshan (Shandong) Tire Co. Ltd. One is related to using a per-kilogram basis instead of a per-piece basis in the calculation; another refers to not using a weight average when reconstructing control numbers.

The result is what the DOC calls a significant ministerial error, which it defines as a mathematical or clerical error that “would result in a change of at least five absolute percentage points, but not less than 25% of the weighted average dumping margin.”

As it relates to this anti-dumping tariff, the recalculated rate for Prinx Chengshan is 30.36%, up from 20.87%.

In every tariff investigation the DOC selects manufacturers to serve as mandatory respondents. Those companies then provide data and answer questions, and those figures and answers serve as the basis and gauge for the whole industry. Other manufacturers also may volunteer to provide their data throughout the investigation as well. Usually there’s at least a slight reward in doing so, because companies who don’t comply can be subject to the highest tariffs.

That was the case in August when the anti-dumping rates were first announced. The DOC set a rate for Prinx Chengshan, and used that same rate for the “non-selected separate rate respondents.” A slightly higher tariff, of 22.57%, was levied against all other manufacturers in China.

As it turns out, the rate for Prinx Chengshan is now higher than the rate originally imposed on all the other manufacturers, so the DOC is applying the 30.36% tariff to all truck and bus tires from China.

Keep in mind, the anti-dumping rate is only half of the tariff equation.

There are two ongoing investigations related to truck and bus tires from China, and the two rates are combined and levied on all shipments. These anti-dumping tariffs are added to the countervailing tariffs, which are imposed to account for subsidies the companies are receiving from the Chinese government. The countervailing tariffs vary slightly by producer: 17.06% for Double Coin Holdings Ltd.; 23.38% for Guizhou Tyre Co Ltd.; and 20.22% for all other importers.

But the net effect is that most truck and bus tires from China will be assessed a 50.58% tariff.

(Double Coin’s combined rate is 47.42% and Guizhou Tyre’s combined rate is 53.74%.)

These figures represent the preliminary phase of both tariff investigations. The DOC continues to investigate and is scheduled to make its final ruling Nov. 9, and the International Trade Commission is scheduled to hold a final hearing on the investigation Jan. 24, 2017.

Related Topics: bus tires, Chinese tariffs, DOC, TBR tariff, truck tires

Comments ( 2 )
  • Joy from MTD

     | about 2 years ago

    Hi Bob. As these tariffs go through the process, the rates are published in the Federal Register. Once published, the Customs and Border Protection office is ordered to begin collecting them. This higher rate of 30.36% was published on Oct. 14, 2016, so that's when this rate would be effective.

  • See all comments
More Stories
The Maxam MS913 featues a wear- and cut-resistant tread compound.
News Maxam MS913 Comes in 5 Core Sizes

Maxam Tire North America Inc. is adding to its lineup of off-the-road tire products. The MS913 features an E3/L3 rock lug pattern and a heavy duty under tread for improved puncture resistance and sidewall protection.

Camso will build tracks and track systems in a new plant that will open in 2020 in Junction City, Kan.
News Camso Will Open 2nd Plant in Kansas

Camso Inc. is expanding its manufacturing footprint in the U.S. The company will open a new track manufacturing plant in Junction City, Kan., to meet what it says is "the growing demand of tracks and track systems in the agriculture and construction industries."

News Marangoni Retreading Will Raise Prices in Most of Europe

On July 1, 2018, the Retreading Systems Division of Marangoni SpA will upwardly adjust the sales price for rubber materials used to retread tires in all countries of the European Area. "This increase will reflect that of the raw materials used by this sector but should also be seen in the context of the current conditions of the whole TBR tire replacement market." said the company.

Be the First to Know

Get the latest news and most popular articles from MTD delivered straight to your inbox. Stay on top of the tire industry and don't miss a thing!