The tariffs on imports of consumer tires from China expired in September 2012, and the first full year of post-tariff import figures shows that the prospect of making entry-level tires in the U.S. is not good.
Data from the Commerce Department and the Rubber Manufacturers Association show that for 2013, passenger and light truck tire imports from China shot back up. China boosted its passenger tire exports to the U.S. by 55.8 percent last year over 2012, with light truck numbers up 75.8 percent.
The 46 million passenger tires imported from China easily surpassed the nation's previous high of 39.6 million, set in 2008. Total imports, in fact, controlled more than 70 percent of the U.S. replacement market for 2013.
The removal of the tariffs also put downward pressure on pricing in the passenger/light truck end of the tire market. The declared customs value of an imported passenger tire dropped about 10 percent last year, to just under $55. That was led by the shipments from China, with tires averaging just $38, and Taiwan, at $34.73. For light truck tires, the dip was a little less dramatic, with the average value of an imported tire falling 6.1 percent.
Not surprisingly, production of PLT tires in the U.S. dropped last year as imports of those lines surged. Michelin's recent announcement that it will phase out production of car tires at one of its factories in Nova Scotia is evidence that plants in the U.S. and Canada making smaller-sized car tires are in jeopardy.
That's not to say that tire manufacturing in the U.S. is going away. Far from it. Numerous new plant and expansion projects in the U.S. either are coming onstream or are in the works.
But these plants are producing tires that can be made competitively here. Those factories are focusing on such lines as bigger-size premium PLT tires, truck and bus lines, and large farm and off-the-road tires.
That's why imports of medium truck/bus tires dropped last year, while domestic production increased.
It's true that statistics can be used to prove anything. But with these numbers, the message is clear: In the end the market and economics will determine what can be produced competitively here and, of course, what can't.