The U.S. International Trade Commission (ITC) has determined that tariffs on OTR tires manufactured in India will remain.
The determination was made on April 7.
Over the past year, the ITC has gathered evidence to determine whether revoking the tariff orders on off-the-road tires from India - originally implemented in March 2017 - would likely lead to the harm of the domestic tire industry “within a reasonably foreseeable time.” (The agency considers reviews of tariffs five years after they are initially implemented.)
Parties both in favor of the tariffs — namely, domestic OTR tiremakers such as Titan International Inc., — and those who want them lifted — tire manufacturers and importers from India, including Balkrishna Industries Ltd. (BKT) and Yokohama Off-Highway Tires America Inc. — submitted data and participated in a hearing to present their arguments.
The details of what arguments swayed commissioners won’t be revealed until the ITC publishes a report with those views on April 27.
A hearing recap
In a day-long March hearing, Titan - as well as representative of the United Steelworkers union - argued that the tariffs are necessary to protect American production and American jobs.
Paul Reitz, president and CEO of Titan, said if the tariff orders were lifted, “our workers will again be at risk.”
He said during and since the pandemic, Titan had streamlined its portfolio of products and reduced SKUs. He said the company had “worked our way back to positive performance” since tariffs were imposed in 2017.
Paul Hawkins, senior vice president of aftermarket sales and marketing for Titan, said the tariffs “have had a significant impact” on the company.
Michael Millsap, a union member and district director, has worked with and around Titan for more than a decade. He said since the OTR tariffs were put in place, he had seen Titan use the relief it’s been afforded to reinvest in its operations and “especially its workers.”
David Mickelson, president and CEO of Graham Tire Co., testified that Graham Tire has been a Titan dealer since 2005.
He said that Graham Tire carries a full line of Titan products and that it is “by far” the dealership’s largest OTR tire brand. He added that Titan’s offerings allow the tire dealership to fully serve its customers’ needs.
Reitz referred to Graham Tire as its most important aftermarket customer.
Mickelson said he’s seen more OTR tires made in India in the market in the last five years - and especially in the aftermarket. He said those tires are “by and large comparable with American-made products, though they’re aggressive on price.”
Representatives from BKT and Yokohama Off-Highway Tires countered that their products are helping to meet growing demand for OTR tires in the U.S. market. They said Titan is focused on the original equipment market, while imported tires largely serve the aftermarket. (That’s a claim Titan rebuffed, noting both are “equally important” to the tiremaker.)
Doug Kershaw, president of BKT USA Inc. and BKT Tires Inc., testified that about 80% of BKT’s U.S. business is ag-related and all of those farm tires are built to order. Kershaw said BKT often sells into sectors that are “underserved.”
He said that BKT has grown due to strong demand - not just ag, but construction and mining tires, too. Kershaw said given current conditions, he expects that growth to continue and that there will be increased demand for OTR tires for the foreseeable future, in large part because of the passing of the federal infrastructure bill.
Kershaw also said BKT’s customers have indicated that “U.S. producers have been unable to supply all of their demand needs in certain segments.”
Ravi Joshi, senior deputy general manager for BKT, said the fast-growing economy in India has resulted in growth for tiremakers and all sorts of businesses tied to infrastructure and construction. In India, there are massive projects underway to build roads and by 2025 the total length of roads in the country is expected to triple.
BKT is growing to meet that demand in India and also to meet demand in the U.S. and other markets.
“It is a good time to be an OTR tire producer, whether in India or in the United States,” Joshi said.
Domenic Mazzola, vice president of original equipment sales for Yokohama Off-Highway Tires America Inc., testified about some of the differences between the products and markets served by domestic producers and import tiremakers.
He pointed to segmentation and specialization by tiremakers, which is then further separated by size offerings. As one example, he said “foreign producers in particular have focused on bias (tires), while domestic producers have focused on higher-cost and expertise radial (tires.)”
Mazzola also pointed to Titan’s financial performance, noting the company has been highly profitable and that days ahead of the March hearing, Titan told analysts that Titan’s “story just keeps getting better" and that the fourth quarter of 2022 was the company’s best fourth quarter in its history.
