DOC Levies Tariffs on OTR Tires From India and Sri Lanka

June 15, 2016

The U.S. Department of Commerce (DOC) has preliminarily determined that off-the-road tires imported from India and Sri Lanka are benefitting from subsidies, and should be subject to countervailing tariffs.

In its India investigation, Commerce calculated a subsidy rate of 4.7 % for Balkrishna Industries Ltd., and a subsidy rate of 7.64% for ATC Tires Private Ltd., a part of Alliance Tire Group. All other producers and exporters of OTR tires in India have been assigned a preliminary subsidy rate of 6.17%.

As for the Sri Lanka investigation, a subsidy rate of 2.9% has been assigned to all exporters and producers, including Camso Loadstar.

And because the DOC has determined that “critical circumstances” exist with respect to certain exporters from both countries, the tariffs are retroactive, meaning the effective date of these tariffs is already in effect. The DOC first will publish these findings in the Federal Register — likely in the next week — and then it will count back 90 days. That date will signal the start date for U.S. Customs and Border Protection to begin collecting the tariffs.

What’s next?

The DOC will continue its investigation, and will announce its final determinations on Oct. 28. There’s always a chance that ruling will be delayed however, since there are opportunities for the petitioners (Titan Tire Corp. and the United Steelworkers) to request an extension.

If the DOC does affirm its preliminary ruling at the final stage, then the U.S. International Trade Commission will vote once again to confirm that OTR tires from India and/or Sri Lanka are materially injuring, or threatening injury, to the U.S. OTR tire industry.

If either agency changes its mind, the countervailing tariffs will be canceled.

The ITC is scheduled to issue its final ruling 45 days after the DOC makes its final determinations — on Dec. 12.

Read the DOC's fact sheet here.

Keep in mind, however, that this represents only one part of the tariff question being investigated by the DOC. The agency conducts separate investigations of whether products are benefitting from subsidies, and whether products are being dumped in the domestic market at too-low prices. The DOC is scheduled to announce the preliminary results of its dumping investigation of OTR tires on Aug. 11.

It will get slightly easier to keep track of the OTR tire tariff after that. The DOC has agreed to align the two investigations, and release its final findings in both the countervailing and anti-dumping cases on the same date in October.