Two Sides to the OTR Tire Tariff
Are off-the-road tire importers from China, India and Sri Lanka flooding the U.S. market, or have domestic producers not adapted and diversified their products to match the evolving market?
That’s the debate the U.S. International Trade Commission heard during a preliminary hearing on a petition by Titan Tire Corp. and the United Steelworkers (USW) union seeking anti-dumping and countervailing duties on products from China, India and Sri Lanka.
Since the 2008 order to impose tariffs on OTR tires from China, Titan said producers in that country have begun exporting mounted tires, in addition to the unmounted tires. Manufacturers in India and Sri Lanka “have also increased their focus on expanding market share in the U.S. market.
“Companies such as BKT and Alliance in India, and Solideal, known as Camso, in Sri Lanka, have been flooding the market with exports of OTR tires in recent years,” said Paul Hawkins, vice president of sales for Titan.
Titan compared an increase in imports from the three countries between 2012 and 2014 to “the overall declining demand for OTR tires” during that same period.
But Domenic Mazzola, vice president of engineering and OE sales at Alliance Tire Americas, said Titan’s broad statements about the downturn in the OTR market are oversimplifying the market.
“It is simply not accurate or meaningful to view the OTR tire market as a single market where all imports compete against all domestic production for customers. Rather, the U.S. OTR market is a series of niche markets, which dramatically reduces the level of head-to-head competition among producers.”
Where Hawkins from Titan had pointed to low commodity prices as one of the indicators of a depressed farm equipment and farm tire market, Mazzola from Alliance said “demand for certain types of tractors has declined dramatically….
“But the dairy and cattle farmers for whom grain is a primary cost input have generally benefitted from this fall-off in commodity prices. As a result, demand for the smaller utility tractors that are used extensively on these farms has increased over the same period.”
The U.S. Department of Commerce will announce Feb. 4 whether it will open its own anti-dumping and countervailing investigations of imports from China and India, as well as a countervailing investigation for OTR tires from Sri Lanka.
The DOC says in 2014 imports of OTR tires from the three countries were: China $6.2 million; India $167.3 million; and Sri Lanka $76.8 million.