CMA LLC responds to preliminary anti-dumping decision

Feb. 15, 2008

Last week's preliminary decision by the United States Department of Commerce (DOC) to impose antidumping duties on imports of new pneumatic OTR tires from China was quickly supported by both the United Steelworkers and Titan Tire Corp.

China Manufacturers Alliance LLC (CMA), the North American marketing arm of Double Coin Holdings Ltd., has a differing view of the decision. Here, in its entirety, is CMA's official response.

"Double Coin/CMA LLC feels strongly against the recent ruling as it pertains to their radial OTR products. We have been involved in the investigation since its inception, presenting data as a manufacturer and an importer of record to the ITC (International Trade Commission)/DOC. We did so because Double Coin adamantly knew that it does not dump product into the U.S. or any country. We knew the facts would be revealed.

"After the ITC's initial phase of investigation, Double Coin was not selected as a mandatory organization to be reviewed by the DOC. All of the manufacturers that were selected are heavily invested in bias tire production and are the largest suppliers of bias OTR tires from China to the U.S.

"Because of that, and the results of the preliminary investigation of large volume bias tire manufacturers, we have received blended rates of additional tariffs of almost 30% on Double Coin radial products for sale into the U.S.

"It has been apparent since the beginning of the investigation that the focus is on low-cost, commodity bias items that have been difficult to competitively produce in the U.S. These types of bias tires have slowly moved from being manufactured in the U.S. for domestic consumption to the Pacific Rim (not just China) due to the cost and profitability.

"Domestic manufacturers have replaced this production in the U.S. plants with higher quality, more profitable radial tire production over the past few years. During the preliminary phase, the importer's questionnaire focused almost exclusively on providing information on bias tires and their production costs and selling prices. Bias R-1, R-4, I-1, E-3, skid steer and other tires were also referenced for cost justifications.

"Double Coin is a producer of radial TBR and radial OTR tires and doesn't participate in this low-cost bias sector. Double Coin radial products compete on the same level as major tire manufacturers around the world as products which assist companies in reducing maintenance costs and increasing profits. We manufacture DOT approved, radial high speed crane products for million dollar mobile cranes, and have been awarded global OEM fitments with the largest manufacturer of mobile cranes.

"Unfortunately, due to the fact that the investigation of 'certain OTR' tires included radial high speed mobile crane tires because of their classification by the U.S. Government Harmonized Tariff Schedule, these tires are now subject to additional duties. The main plaintiff in the investigation, Titan, does not even manufacture these types of tires, and most of another of the plaintiff's production of this product comes from outside the U.S. We are now at a competitive disadvantage on what really is not an OTR tire.

"Recently, we have begun the manufacturing/marketing (of) 24.00R35 E-4 haulage tires and 35/65R33 L-5 loader tires that cost thousands of dollars and are technologically advanced due to the size and application specific nature. Because of the recent rulings, we now are placed in an uncompetitive arena, as our tires will potentially increase in cost to our customers. This places us at a higher price for U.S. customers than the major manufacturers: Bridgestone (and) Michelin.

"Certain domestic manufacturers of low cost bias tires brought this petition to the ITC because they find it difficult to compete with the Pacific Rim on the production of certain small bias industrial or farm tires. The inclusion of these large, technologically advanced tires doesn't make sense.

"Why does the investigation stop at 39-inch tires? Shouldn't the ITC/DOC consider all OTR tires? Do the plaintiffs not have competition in the larger OTR tires and thus not feel that they need U.S. government subsidization?

"Double Coin Holdings Ltd. is a publicly held company that is charged with returning a profit to its stockholders, similar to the plaintiffs. We are a globally recognized radial TBR and OTR manufacturer marketing tires in over 60 countries. We are now penalized in the marketing of our high-quality, radial OTR, industrial and crane products in the U.S.

"If you review the position of Double Coin products in the U.S. market to dealers and consumers, they will all repeat the fact that our products are the highest in price from China, but they are cost justifiable due to the performance. Double Coin radial OTR products have been developed over the years to deliver a high-quality, high-performance option to mining, construction, maintenance and original equipment manufacturers.

"Double Coin has been awarded OEM fitments at some of North America's most noted truck and OTR equipment manufacturers where decisions to utilize products are based on quality and performance, well before any price is discussed.

"Today, when reviewing the manufacturers who brought this complaint to the ITC, they seem to be very successful in their operations and profitability, without any government influence. Most have replaced the products in question -- low-cost bias tires -- with profitable, technologically advanced radial products and bias tires sourced from other areas. Their balance sheets show the payoff of their strategy: very high profitability, without any government intervention.

"Double Coin is taxed with competing against these domestic manufacturers by utilizing our technologically advanced, high-quality products that are sold through a strong dealership channel. The increase in duty creates an uncompetitive market place that ultimately ends up affecting the end user negatively. They will be required to purchase the same quality products at higher, inflated prices.

"Double Coin/CMA can't speak for the other companies from China that manufacture bias products and sell them in the U.S. What we do know is that we do not dump products in the U.S., as evident by our market prices. We do not participate in low-cost bias tire production and marketing in the U.S. We have been unfairly lumped into the general categories that appear in the investigation without knowledge of our market presence or strategy.

"Most of all, we fully plan to actively participate in the final injury determination so that we can show the ITC/DOC that Double Coin shouldn't be penalized for producing, importing and marketing high-quality, technologically advanced tires that consumers have confidence in and request frequently.

"Finally, we feel that in a free-market economy, healthy and fair competition encourages innovative strategies. Fair competition is evident around the globe without governmental influence or unfair blanket penalties. These activities create value for the consumer, not inflationary costs."