A Time of Speculation in Europe as Chinese Tire Tariffs Loom Ahead
In America it has been a common practice for a few years now, but finally Europe is looking toward implementing import tariffs on all new and retreaded commercial vehicle tires that are manufactured in China.
At the beginning of February it was announced that the European Commission (EC) started to implement regulation EU 163 (2018), which follows the commencement of a tire anti-dumping investigation by the commission just over seven months ago. This investigation was brought about after a complaint in June 2017 by the “Coalition Against Unfair Tire Imports” group on behalf of manufacturers who represent around 45% of the European Union’s production of these types of tires.
It seems the EC states that relevant information provided with the complaint claims there are very real and significant tire dumping margins taking place with regards to Chinese-produced tires resulting in imports increasing both in terms of volume and market share. An EC spokesperson informed me that the evidence illustrates that the amount of imports and their prices carry a number of consequences including a concerning, negative impact on quantities of tires sold along with the market share in Europe. This they believe leads to a substantial adverse effect on the entire performance and employment sector right across the European Union’s tire industry and Chinese tire imports are consistently being widely dumped in all European countries.
At the moment there are no clear indications on exactly how this new Chinese tire import registration will be introduced across the European Continent, and as you would expect it has already sparked a lot of anxious questions from European tire companies.
Such as what the import duty costs are likely to be and when will they start being imposed? Also, a growing number of worried European tire wholesalers are speculating that all future Chinese truck tires could be loaded with a high levy — maybe as much as 30%.At the same time there are people in the market who feel that until the precise details of an import tariff in Europe are known, the most sensible response is to remain calm because in situations like this it is all too easy for scare mongering to spring up which could lead to some tire importers introducing their own arbitrary price structure ahead of the tariff’s commencement.
From people I have spoken with ranging from tire importers right through to wholesalers in a variety of European countries, the general feeling is one of “wait and see what happens” and deal with the situation when it becomes clear what impact the tariffs may have on their businesses.
What is clear is that China already has a growing influence in all European tire markets and to impose an import charge would, in effect, make Chinese tires too expensive given their status in the market.At the same time I am aware that some Chinese tire producers are already taking action of their own to combat any future tariffs by switching their manufacturing activities to other Asian countries.
My own feeling is that a great deal of thought needs to go into this development before it is implemented as it is going to affect a lot of companies and people working in the European tire industry. At the moment it is early days and we will just have to wait until the EC completes its investigation into tire dumping, which could be another 12 months away.
Over the past few years, the European tire industry has watched intently as the U.S. imposed tire tariffs on Chinese tires. Now the situation has reached their own doorstep and it will be very interesting to see how the situation develops. ■
John Stone has been working within the global tire industry for the past 27 years. In 2004 he launched his own consulting company, Sapphire Media Services, which caters to business media clients around the globe. Stone also writes for tire and automotive-related publications in Europe, South Africa and Asia.
To read more European Notebook columns, click: