Shandong would feel full force of US duties on Chinese tires

(Jane Ho, ERJ special correspondent, China)

Jinan, Shandong, China – Shandong province would be seriously impacted if US anti-dumping tariffs are passed, with about 70 companies affected within the province.

According to Fang Xiaojie, head of fair trade division of the Department of Commerce of Shandong Province, in 2013 Shandong exported $1.7 billion (€1.3 billion) relevant products to the US, accounting for 51% of the country's total amount.

"Although the new tariffs would cause great damage with almost doubled export price to the US, it's unlikely to lead to many closedowns," said Fang. "A majority of relevant companies still focus on the domestic market and also have export business to Africa and the Middle East."

The China Rubber Industry Association declined to comment on the anti-dumping investigation.

ERJ’s sister publication, Rubber News, reported that the International Trade Commission (ITC) voted 6-0 to continue an antidumping and countervailing duty investigation against passenger and light truck tire imports from China, sending the case into its next phase.

The 22 July ITC vote came exactly one week after the US Department of Commerce decision to initiate the investigation, which was instigated by petitions submitted 3 June to the ITC by the United Steelworkers union (USW).

The next move in the case – a preliminary determination on the amount of Chinese government subsidies in the countervailing duty investigation – is due from the Commerce Department on 17 September.

USW international president Leo W. Gerard was pleased by the commission vote.

The union previously petitioned for relief in April 2009 under Section 421 of the Trade Act, a provision designed specifically to help US industries hurt by upsurges in Chinese imports.

In September 2009, the Obama administration granted relief in the form of high tariffs against Chinese tires. The tariffs reverted to their previous level of 4 percent in September 2012.

In testimony before the ITC, the USW said Chinese tire imports skyrocketed after the Section 421 tariffs ended – from 24.5 million in 2011 to 50.8 million in 2013. The union said it also discovered dumping margins as high as 92 percent, as well as more than 40 government subsidies – including 12 related directly to imports – available to Chinese tire makers.

Roy Littlefield, executive vice president of the Tire Industry Association, which opposes duties against Chinese tires, said: “We are disappointed but not surprised. We had feared from the beginning that this was on a fast political track.”

After the 17 September preliminary determination on countervailing duties, the US Department of Commerce is scheduled to make its preliminary determination on dumping margins on 1 December.

ERJ would like to hear your opinions on trade protection measures in Europe.

Our survey is here: www.european-rubber-journal.com/survey