BEIJING—The China Rubber Industry Association is challenging the European Commission's assertion that imports of Chinese truck and bus tires into the European Union are the cause of reduced profitability by European tire makers and retreaders.
The EC determined earlier that imports of Chinese truck/bus tires were damaging European producers and announced in early May provisional antidumping duties on makers and importers of the products.
The EC said it believes Chinese imports undercut the EU industry's prices during the investigation period by 21 percent to 31 percent, leading to reduced profitability to 66.8 percent from 72 percent for Tier 1 and 2 tires, respectively, including premium new tires and most new and retreaded non-premium tires.
For Tier 3 tires, profitability fell to 13.7 percent from 15.6 percent.
In its letter, however, CRIA argues that the Tier 1 profitability drop was caused by delayed reflection of rising feedstock prices in tire prices since 2016, and Tier 2's by strong competition among EU tire makers. It believes that, as such, the profitability-drop cannot be deemed as injury.
The association further maintained that Chinese imports are barely present in the Tier 1 market, and only a small fraction can be found in Tier 2.
Regarding Tier 3's profitability drop, CRIA stated that the EC has shown no causal evidence and the tier's profitability actually rose from 2015 to 2016, when Chinese imports were at their maximum. CRIA also avers Tier 3's 15.6 percent profitability is unreasonably high.
On the EU industry overall, CRIA doubts the EC's weighting method, claiming it "amplifies the importance of the sampled Tier 3 tire makers' data," and requires the disclosure of the detailed mathematical model and the EC's sources of information, such as on tier 3 tires' sales volume ratio in all tiers.