Commercial Business

ITC Ruling on Chinese Imports Has Ripple Effect on Retreading

Posted on November 2, 2018

The last chapter on whether or not truck and bus tires imported from China have negatively impacted domestic tire manufacturers -- and retreaders -- has not been written.

On Nov. 1, 2018, the U.S. Court of International Trade (CIT) “remanded the negative U.S. Court of International Trade (ITC) injury determination on truck and bus tires from China,” according to Retread Instead, a coalition of retread industry supporters created to enhance the awareness of the environmental and economic benefits of retreading throughout North America.

This means ITC must reconsider a February 2017 CIT ruling that the domestic tire industry was neither materially injured nor threatened with material injury by reason of imports.

The ITC will now review the CIT decision and the underlying record as it considers how to proceed. The court has given the commission time to conduct the remand.

As background, the Tire Retread & Repair Information Bureau (TRIB) reports “the USW (United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union) had lodged an appeal to the CIT regarding the ITC's final determination to not enact anti-dumping duties as high as 22.57% and countervailing duties as high as 65.46% on Chinese truck and bus tires.”

TRIB says the CIT concluded that:

1) The ITC's negative adverse price effects determination is not supported by substantial evidence.

2) The ITC's negative threat determination is not supported by substantial evidence.

Therefore, the CIT remanded the ITC's final determination for reconsideration consistent with their opinion. The CIT also ordered that:

1) The ITC shall file its remand redetermination on or before Jan. 4, 2019

2) The ITC shall file the administrative record on remand on or before Jan. 18, 2019

3) The parties shall file any comments on the remand redetermination on or before Feb. 4, 2019

4) The parties shall file replies to the comments on or before March 6, 2019 5) And that the joint appendix shall be filed on or before March 20, 2019.

The CIT ruling noted that the “plaintiff maintains that purchasing decisions focused on the price of tires over other non-price factors, and argues that most purchasers who switched from purchasing domestic tires to Chinese tires did so primarily on the basis of price.

“The commission found that while price was an important factor in purchasing decisions for truck and bus tires, non-price factors were also important to purchasers. The commission determined that non-price factors, including brand, warranty, retreadability, technical support, reliability of supply, and product consistency were important in purchasing decisions.”

It also noted, “Purchasers also identified availability and quality as non-price reasons for purchasing imported rather than U.S.-produced product.”

The ruling states, “The commission determined that the subject imports did not impact the domestic industry significantly. Although U.S. demand for truck and bus tires increased by 21.3% from 2013 to 2015, subject imports increased nearly twice that amount, by 41.9%. As a result, the market shares for companies of the subject imports grew by 4.9%, while the market shares for domestic producers dropped by 7.7%.

“The commission found that the domestic industry was able to increase production, shipments, employment, wages, productivity, gross profits, operating income, net income, and capital expenditures, and maintain a high capacity utilization rate. Because the domestic industry was able to show success despite the high rate of subject imports, the commission concluded that the subject imports did not impact the domestic industry.”

On the retreading front, “Effective enforcement of U.S. trade remedy laws is very important to the U.S. retread industry. Retreading commercial truck tires in the U.S. is a $3 billion industry that has significant economic and environmental benefits to our nation,” says Retread Instead. “There are well over 100,000 U.S. jobs in retreading and related industries that are being threatened by the importation of non-retreadable truck and bus tires from China that are sold at below fair market value.”

The coalition “supports imposing tariffs, antidumping duties and countervailing duties on commercial Chinese truck and bus tires that are imported into the United States because, China is a ‘non-market economy’ that dumps low quality non-retreadable truck tires into the U.S below fair market value thus undermining the retread industry.”

The full opinion and order from the CIT can be viewed here: https://www.cit.uscourts.gov/SlipOpinions/Slip_op18/18-151.pdf.

See also:

Retread Instead Steps Up Letter-Writing Campaign to Support Tariffs

No Tafiffs Will be Assessed on Truck and Bus Tires From China

Related Topics: Chinese tariffs, International Trade Commission, ITC, tariffs, USW

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