Why one tire maker's tariff now is retroactive

June 22, 2015

One tire manufacturer was dealt a one-two punch by the latest calculation of anti-dumping and countervailing duties by the U.S. Department of Commerce.

First, both of GITI Tire (Fujian) Co. Ltd.’s rates increased substantially from the DOC’s preliminary ruling. GITI’s anti-dumping rate increased from 19.17% to 29.97%, and the countervailing rate rose from 11.74% to 37.20%.

Second, the countervailing rate, which more than tripled, now is retroactive, and due on shipments since Sept. 2, 2014. (Why that date? It marks 90 days prior to when the DOC published its original preliminary ruling in the Federal Register.)

In its explanation of why GITI must pay those duties for back shipments, the DOC says it relied on the information the company provided about its tire shipments. The DOC says GITI imported a “massive” number of tires during its investigation period — June 2014 through November 2014 — and thus must retroactively pay countervailing duties on its shipments. The DOC compared shipping data from those months to data from December 2013 through May 2014.

The DOC defines “massive” as an increase in imports of more than 15%.

While the DOC determined critical circumstances did exist in the countervailing investigation, it said no such circumstances existed in the anti-dumping case.

Additionally, the DOC says the GITI companies received subsidies “inconsistent with the World Trade Organization Agreement on Subsidies and Countervailing Measures.”

The agency looked at that same data for Cooper Kunshan Tire Co. Ltd., but did not find evidence of “massive” imports during the reporting period. Thus, Cooper’s rate is not retroactive.

The countervailing duties for Shandong Yongsheng Rubber Group Co. Ltd. and all others were previously ruled to be retroactive, and the DOC did not change that ruling.

Yongsheng was assessed the highest countervailing rate of all — 100.77%. Throughout the DOC’s investigation Yongsheng has declined to answer DOC questions or provide any data. As a result, the agency has applied “adverse facts available due to the company’s failure to participate in the investigation.”

With respect to the anti-dumping investigation, DOC did not adjust which companies must pay the rates retroactively.

To review all of MTD’s coverage on the DOC’s June 12 ruling, read:

UPDATED: DOC affirms tariffs, increases rates for nearly all tire makers

UPDATED: One manufacturer's tariff reaction: 'stunned'

Kenda will limit impact of duties, says Yang

Tariff won't slow Sentury's expansion in U.S.