WASHINGTON—Two Asian tire makers with U.S.-based manufacturing—Hankook Tire & Technology Ltd. and Sumitomo Rubber Industries Ltd.—are both urging the U.S. to reconsider the imposition of antidumping duties on passenger and light truck tire imports from South Korea, Taiwan, Thailand and Vietnam.
In testimony prepared for the May 26 International Trade Commission (ITC) hearing on the proposed duties, representatives of both companies are set to tell the agency that imposing antidumping duties on the subject tires will have negative impacts on their companies and will not lead to increased production of lower-tier tires.
Curtis Brison, U.S. passenger car and light truck sales vice president at Hankook Tire America Corp., said, "…a global tire manufacturer like Hankook cannot practically and efficiently rely on a single U.S. manufacturing facility to produce all of the many tire models demanded by our U.S. customers.
"We rely on imports to complement our U.S. production and thereby provide our U.S. customers with an attractive range of tires.
Brison added, "The success of Hankook's U.S. operations and ongoing investment in Clarksville, Tenn., depends on our ability to continue supplying our U.S. customers with imports from Korea."
Brison noted that the U.S.-based manufacturing capacity is limited in its ability to serve the diverse demands of the replacement market, and "even if U.S. demand were not so diverse, imports would still be necessary because the U.S. tire industry does not have sufficient production capacity to make the total volume of tires required by U.S. customers."
This latter situation is compounded by U.S. producers' poor track record in fill rates, meaning retailers and distributors have to carry multiple brands and a wide variety of SKUs in order to ensure that they always have product available to meet consumer demand.
"This further drives the need for imported tires," he said, "particularly in the replacement market segment."
Richard Smallwood, president and CEO of Sumitomo Rubber North America Inc., presents similar arguments in his prepared testimony.
"The U.S. tire market is in a state of constant and accelerating transition, and producers in the U.S. do not have the capacity or production flexibility to fully and profitably service all market segments," Smallwood said, noting that applying duties in subject tires will not help U.S. production.
"This is not a problem caused by the subject imports and they should not be punished for supplying tires the market needs."
Smallwood also noted that duties would cut off or limit supplies from the four subject countries, "but multinational producers will find ways to supply the tires demanded by the U.S. market.
"I cannot speak for my competitors, but in Sumitomo Rubber's case, the duties would not cause us to increase production of lower value-added tiers in the U.S."