ITC hears arguments for, against duties on Indian, Sri Lankan OTR tires

WASHINGTON—Advocates and opponents of duties against pneumatic off-the-road tires from India and Sri Lanka sparred at a final determination hearing before the International Trade Commission Jan. 4.

The same day, the U.S. Department of Commerce issued very low countervailing duties against Indian and Sri Lankan OTR imports, and found no evidence of dumping against Indian OTR tires. Sri Lankan OTR tire importers were not investigated for dumping.

Titan International Inc. and the United Steelworkers union petitioned the ITC for relief in January 2016, requesting formal investigations of OTR tires from China, India and Sri Lanka under Sections 701 and 731 of the Trade Act.

Chinese OTR tire importers were later excused from the investigation, but the ITC and Commerce pursued countervailing duty investigations against both India and Sri Lanka and antidumping duty investigations against India.

In its final determination issued Jan. 4, Commerce found subsidy rates of 5.36 percent against Indian OTR manufacturer Balkrishna Industries Ltd. (BKT), 4.9 percent against Indian manufacturer ATC Tires Private Ltd.; and 5.06 percent against all others.

Camso Loadstar (Private) Ltd., a Sri Lankan OTR tire producer, received a final countervailing duty rate of 2.18 percent, the same amount levied against all other Sri Lankan producers.

These rates were even lower than those issued by Commerce in June 2016. Those rates were 4.7 percent against BKT, 7.64 percent against ATC, 6.17 percent against all other Indian producers, and 2.9 percent against all Sri Lankan producers.

In his testimony, Titan International Chairman Maurice M. Taylor Jr. cited the ITC's 2008 decision granting Titan and the USW antidumping and countervailing duties against Chinese OTR imports.

"Those orders have had significant benefits for Titan and for the domestic industry as a whole," said Taylor in written testimony read for him by his attorney, Terence P. Stewart, because Taylor had a cold.

"Unfortunately, our U.S. market remains an attractive target for foreign OTR tire producers seeking to offload excess capacity and gain market share at our expense," Taylor said in his written testimony.

Advocates of the duties said the current situation was very similar to that with China in 2008. Indian and Sri Lankan OTR imports increased significantly between 2013 and 2015, they said, while domestic OTR shipments declined absolutely and lost market share because of imports.

"The OTR tire industry provides high-paying, high-skilled jobs with family-supporting benefits," said Stan Johnson, USW International secretary-treasurer. "All of this is now at risk because of subsidized imports from India and Sri Lanka."

However, opponents of the duties said their shipments could not be cumulated, as advocates said they could, because they represent too many segments and sub-segments within the OTR tire market.

Domenic Mazzola, vice president of engineering and OE sales for ATA, said whereas U.S. OTR tire makers concentrate on the original equipment market, ATA focuses on the aftermarket.

"It is well known in the industry that historically Titan has focused its efforts on the OE segment of the U.S. OTR market," Mazzola said. "This dependence on sales to OE manufacturers has hurt Titan significantly over the Commission's period of investigation, as demand in the OE segment has declined substantially."

Net farm income dropped by 46 percent between 2013 and 2015, causing Titan's OE sales to fall 20-30 percent during the same period, opponents of the duties said.

Robert Bulger, vice president and general manager of Camso USA Inc., said his company specializes in bias-ply construction tires under 25 inches in diameter, and does not compete at all with U.S. OTR manufacturers.

But Paul Hawkins, Titan vice president of sales, said this was inaccurate.

"Even if Camso's sales are concentrated in the industrial-construction segment, this is a very important part of the OTR tire market for our company," Hawkins said. "Titan produces a broad array of industrial and construction tires that directly overlap with those produced by Camso."

According to Commerce Department figures, OTR imports from India and Sri Lanka declined in dollar value between 2013 and 2015.

Indian imports went from $188.9 million in 2013 to $167.3 million in 2014 and $156.2 million in 2015, the agency said. Sri Lankan imports went from $94.7 million in 2013 to $76.8 million in 2014 and $66.6 million in 2015, it said.

The ITC is scheduled to make its final determination Feb. 17 on whether Indian and Sri Lankan OTR tire imports are causing material injury to the U.S. OTR tire industry.