Deja Vu! Tires From South Korea Were Under the Microscope 35 Years Ago
You might be tempted to think that the current antidumping investigation of consumer tires made in South Korea, Taiwan, Thailand and Vietnam is an unprecedented development.
But tires from at least one of these countries happened to be embroiled in a nearly identical situation more than 35 years ago.
"Charging that 'massive' dumping margins on South Korean radial passenger tires are the 'principal cause of the tire industry's floundering prices and declining profits,' five American tire manufacturers have petitioned the United States International Trade Commission to impose anti-dumping duties on the Korean imports," wrote Ted Orme in the September 1984 edition of MTD. (Orme was this publication's Washington D.C. correspondent.)
Those U.S.-based tiremakers were Armstrong Rubber Co., BFGoodrich Co., Cooper Tire & Rubber Co., Firestone Tire & Rubber Co. and Goodyear Tire & Rubber Co.
Their targets? Hankook Tire Manufacturing Co. Ltd. and Samyang Tire Manufacturing Co. Ltd., later known as Kumho - and "their import and export firms that have been dumping radial passenger tires on the American market at prices below the going domestic retail rate, and from $15 to $33 lower than the wholesale prices of those same tires" in South Korea.
At the time, the five domestic tire manufacturers listed above claimed that around 3.4 million tires had been exported from South Korea to the U.S. in 1983, an increase of nearly 250% from 1982 volumes. By contrast, MTD estimated that a total of 134 million tires were shipped within the U.S. during 1983 at the replacement level. (According to the 2021 MTD Facts Issue, which you can view here, South Korea exported 13.6 million passenger tire units to these shores in 2020, a 21% decrease from 2019 numbers.)
Hankook, at least, did not take the domestic manufacturers' claims lying down.
"As far as we can see, there was no dumping and there was no injury to U.S. tire manufacturers," said Bill Finn, sales operations manager for the company, who expressed consternation that such a small sliver - 3%, by his estimation - of the total marketplace "can dictate pricing. The reason for the big increase (in import figures) is that we have introduced tires that fit domestic cars."
Hankook entered the U.S. P-metric radial market in 1982.
"When we were capable of making tires for domestic cars, volume increased," Finn argued.
He went on to disclose that Hankook and other South Korea-based passenger tire manufacturers had been operating under "self-imposed restrictions" anyway, with an annual, overall export cap of 3.8 million units to the U.S.
Orne also spoke with Dave Frederick, then vice president of operations for Big O, which sourced tires from Samyang at the time. Frederick felt that South Korean manufacturers "were not in a dumping posture."
Furthermore, he told Orne that two of Big O's domestically headquartered tire suppliers were sourcing products from two "foreign countries." (Specific companies were not mentioned.)
Inguer Park, a representative from the South Korean embassy in Washington D.C., even weighed in, stating that the antidumping investigation "was very regrettable for us.
"The financial condition of the U.S. tire companies is getting better these days, regardless of the situation they are filing for. The car business is booming and that means the tire business is booming. Therefore, there is no evidence that we are hurting their business."
Doesn't some of the above sound familiar?
The United Steelworkers union - whose call for an investigation into consumer tires built in South Korea, Taiwan, Thailand and Vietnam dates back to last summer - recently said it "strongly opposes” a recent proposal from four Taiwan-based tiremakers that essentially requested an exemption from the antidumping investigation that is currently taking place. (You can read more about that development here.)
I wasn't surprised to hear that bit of news. But looking back in time, what did surprise me - at least somewhat - is that tires from South Korea have been under the government's microscope for decades, albeit not on a constant basis.
It will be interesting to see how the current antidumping investigation plays out. The U.S. Department of Commerce is scheduled to announce its final determinations on or about May 14, 2021, unless that deadline is extended.