News that the Commerce Department has made a preliminary ruling that imports of truck and bus tires from China have been dumped at below-market prices into the U.S. is another blow to the Chinese tire industry.
Besides the ongoing hits the nation's tire sector is taking in antidumping and countervailing measures in most tire product areas, China's tire makers are coming off a year when sales, profits and production are down double-digits. That's a situation industrial concerns haven't been accustomed to in China, where for years it seemed like growth and investment were unending.
From the standpoint of tariffs and duties, the United Steelworkers union has led the charge for much of the last decade. If the latest decisions from Commerce become final, total duties against Chinese truck and bus tire imports will amount to roughly 40 percent. The union and the Alliance for American Manufacturing—a partnership between the USW and a group of American manufacturing firms—say the numbers show that evening out the playing field results in more jobs and domestic production.
As for the truck/bus tire sector, the Commerce Department said that imports from China accounted for 8.9 billion tires in 2015 at a value of more than $1 billion, up from 6.3 million worth $885 million two years earlier.
The exclusive distributor for Double Coin tires in the U.S. said the only thing the decision will do is raise prices for consumers of these tires, arguing that there isn't enough U.S. capacity to supply market needs.
Regardless of the decisions on tariffs, though, the Chinese tire industry knows it must make major changes to ensure its long-term success.
The Chinese Rubber Industry Association's China Rubber Industry 2025 initiative maintains that major investments in technology—including adoption of continuous automation in processes and smart manufacturing systems—were needed. Rather than the old way of trying to make and sell tires as cheaply as possible, the CRIA feels that embracing a new way of doing business where quality is a major focus along with improved efficiency.
That holds the best prospect for bringing prosperity back to its nation's tire industry.