CYPRESS, Calif. (Sept. 23, 2009)—Toyo Tire & Rubber Co. Ltd. will move production of consumer tires it makes in China for export to the U.S. to plants in Japan in response to the Obama administration's decision to impose higher tariffs on Chinese-made passenger and light truck tires.
“Our No. 1 priority is customer satisfaction, and we are making every effort to minimize disruption in supplies to our dealers by expediting these production changes,” Toyo Tire USA Corp. said in a prepared statement.
Toyo did not say how many tires it imports from China or which lines they are, but in testimony prior to the administration's Sept. 11 decision to add 35-percent tariffs on Chinese consumer tires for the next 12 months to an existing 4 percent duty, Toyo said the tariffs originally proposed by the International Trade Commission would prevent it from importing any tires from China during the three-year remedy period.
“The ITC's proposed remedy would, in effect, be a zero quota,” Toyo said in its testimony in August to the U.S. Trade Representative Office, which advised the Obama administration on the matter.
As for pricing, Toyo said it is assessing the impact of the trade action on the marketplace.
Toyo sources tires for the U.S. market from Cheng Shin-Toyo Tire & Rubber (China) Co. Ltd., its former joint venture plant in Kunshan, China. Toyo and Taiwan's Cheng Shin Rubber Ind. Co. Ltd. set up the joint venture in 1995, but Toyo disclosed in early September it is selling its share in the venture and instead will build its own plant in China.
At that time, Toyo said it would switch its relationship with Cheng Shin to a consignment manufacturing agreement to allow it to continue to supply customers until its own factory comes on stream, which it's targeting for year-end 2011.