HILTON HEAD, S.C.—Should the International Trade Commission and the Commerce Department levy countervailing and antidumping duties against Chinese truck, bus and off-the-road tires?
From the standpoint of tire dealers, distributors and retreaders, this is a complicated question, according to speakers at the 32nd Clemson University Global Tire Industry Conference, held April 13-15 at Hilton Head.
In the question-and-answer period after her speech, Freda Pratt-Boyer, senior auditor for Purcell Tire & Rubber Co., admitted she was undecided about the question.
Chinese tire manufacturers are important suppliers to the lower end of the U.S. tire supply chain, Pratt-Boyer said. But Purcell Tire, one of the largest retreaders in the U.S., relies on a steady stream of high-quality, retreadable casings, and China is not a reliable supplier of such casings.
Also, a flood of low-priced truck and bus tires into the U.S. could do to truck tire retreading what cheap new passenger tires did decades ago to U.S. passenger retreading, according to Pratt-Boyer.
“I don't want to see the retreading industry go away, and I'm afraid this would be a step toward that,” she said. “I'm afraid that in 10 years, we won't have any truck tire retreaders left.”
Mike Wolfe, owner/operator of Southeastern Wholesale Tire and Pratt-Boyer's co-presenter at the Clemson conference, said during the Q&A period that he would like to see tariffs on Chinese truck and bus tires of 10 to 12 percent.
“That would keep tires from coming in too fast and too cheap,” Wolfe said.
But very high tariffs, such as the one the federal government levied against Chinese passenger and light truck tire imports for three years starting in 2009, would cause a flood of used tires on the market, with dealers who mostly don't inspect their goods for defects, he said.
In their presentation, Pratt-Boyer and Wolfe delivered facts from a tire distributor's standpoint about China's impact on today's U.S. tire market.
Medium commercial tire imports from China rose 68 percent between 2000-15 and are expected to grow another 30 percent by 2020, according to Pratt-Boyer.
“In 2010, China was actually producing more than 40 percent of the world's tires, with excess capacity of more than 340 million tires,” she said. “Going forward to 2020, China's production is forecasted to climb to almost 50 percent of the world's production.”
Net tire imports to the U.S. rose 47 percent between 2002-07, to 144 million from 98 million, according to Pratt-Boyer. However, imports dropped 2 percent over the next five years, to 141 million units, largely because of the federal government's antidumping actions.
Meanwhile, China's tire production has not slowed at all, with growth of better than 40 percent projected for the 2007-17 period, according to Pratt-Boyer.
“This means that the China factories not only managed to supply their own markets—which grew very rapidly over this period—but also increased exports significantly,” she said.