WASHINGTON—David Johanson, the lone dissenting voice in the recent International Trade Commission determination that the U.S. tire industry is being harmed by low-priced imports from Asia, based his decision on three key points, including the domestic industry's "healthy rate" of profitability during the period under review.
The ITC, which consists of five commissioners, voted 4 to 1 on June 23 that the U.S. tire industry was "materially injured or threatened with material injury by reason of subject imports" of passenger/light truck tires from South Korea, Taiwan and Thailand found by the U.S. Commerce Department to be sold in the U.S. "at less than fair value."
As a result of that determination, import duties proposed by Commerce on the subject products—and which have been in effect since January—are now confirmed and will be in place for at least the coming five years.
Johanson, a commissioner on the ITC since 2011, listed three key reasons in his separate determination why he believed there is no material injury or threat of material injury:
1) The market share shift observed in 2020, ultimately favoring subject imports, is not likely to have occurred without the market disruptions caused by the COVID‐19 pandemic to both demand and supply.
2) Despite consistent price underselling by subject imports, there were no adverse price effects on the U.S. prices of the domestic-like product.
3) The deterioration in the financial performance of the domestic industry, which remained at a healthy rate of profitability, was driven by declining domestic production that led to higher unit direct labor and unit "other factory costs," even as the gross values of those costs declined.
Johanson's dissenting opinion is contained in the ITC's final report of the matter, posted recently for those entities involved in the issue. It will be available for public consumption later in July on the ITC's website.
