Industry Braces for Tariffs While a New 'Contender' Emerges
As the International Trade Commission wraps up its investigation of consumer tire imports from South Korea, Taiwan, Thailand and Vietnam, I thought it would be interesting to look at how many tires those countries shipped to the U.S. last year - and what the next tire manufacturing “hot spot” could be.
Thailand once again topped the consumer tire exporter list in 2020, having shipped 42.7 million units, according to MTD’s 2021 Facts Issue.
That’s a drop of 5.1% from 2019 levels, but still more than twice the number of passenger and light truck tires that the next biggest exporter, South Korea, shipped to the U.S. (South Korea shipped nearly 20% fewer consumer tires to the U.S. last year than it did in 2019.)
In contrast to Thailand and South Korea, both Vietnam and Taiwan boosted their shipments to the U.S. - with Vietnam seeing an 8.2% increase and Taiwan increasing by 5.4%, according to MTD research.
Here’s a more detailed snapshot of numbers at the end of 2020:
Breaking down import/export numbers even further, it’s extremely notable that Malaysia boosted the number of passenger tires it shipped to the U.S. by 56.2% during 2020.
In 2019, Malaysia, which is profiting from its newly industrialized market economy, enjoyed a gross domestic product of $364 billion - the 36th biggest in the world - putting it ahead of South Africa (number 37), Finland (number 44), Vietnam (number 45), Hungary (56), Sri Lanka (number 68) and other nations that host tire manufacturing facilities.
It would be illogical to think that tire manufacturers - particularly those that could be adversely impacted by new tariffs - aren't looking at Malaysia as a potential new production base.
We’ll have to see how the data shakes out, but I wouldn’t be surprised if Malaysia exports even more tires to the U.S. this year. And that's without adding plants.