Thai TBR duties could hinge on ITC view of tier structure

WASHINGTON—In the end, the federal government's decision whether to impose elevated import duties on truck/bus tires from Thailand might depend on whether the commissioners of the International Trade Commission believe in tier segmentation or not.

The United Steelworkers union, which petitioned the ITC three weeks ago seeking elevated antidumping duties on truck/bus tires from Thailand, is basing its claim of unfair competition largely on its belief that the tire industry's tier-pricing structure is little more than hyperbole and that nearly all tire brands compete on equal footing, according to testimony presented Nov. 6 at a hearing held at ITC headquarters in Washington.

Thai tire producers, on the other hand, argue their products are sold predominantly in the Tier III and Tier IV categories, rarely competing with Tier I and II brands from U.S.-based manufacturers and therefore do not present a potential harm to the U.S. tire industry.

Prinx Chengshan Tire North America Inc. was the only company opposing the USW's petition to testify in person. Sam Felberbaum, president, Ken Coltrane, vice president of marketing and development, and Michael Chu, general manager of international sales center, were on hand to provide both prepared statements and to answer questions from the commissioners.

Felberbaum and Coltrane argued that domestically produced truck tires are sold predominantly to OE customers and major fleet customers, where contract terms are negotiated directly between the fleets and the tire makers and include value-added components such as mounting/balancing costs, roadside assistance, tire-tracking, favorable retreading terms, real-time inventory access, etc.

Tire makers/branders active in the Tier III/IV categories, on the other hand, compete much more heavily on price alone and service the independent trucking fleets and owner-operators to a much greater degree than do the major brands, Felberbaum and Coltrane testified.

Other import/wholesale companies that submitted written testimony on the matter include: American Omni Trading Co.; American Pacific Industries Inc.; America Tire Distributors Inc.; China Manufacturers Alliance L.L.C.; Deestone Corp. P.C. Ltd.; Delta Wholesale Inc.; Empresas Del Rio Rey Inc.; Foreign Tire Sales Inc.; Global Tyre Solutions Inc.; Horizon Tire Inc.; Huayi Group (Thailand) Company Ltd.; Jinyu Tire USA Co. Ltd. Inc.; North American Commercial Tire Resources Inc.; Omni United (S) Pte. Ltd.; Otani Radial Co. Ltd.; Statewide Tires Inc.; Sutong Tire Resources Inc.; TBC Corp.; Tire Get Inc.; Tire Group International L.L.C.; Total Tire USA Inc.; Tyres International Inc.; Toyo Tire U.S.A. Inc.; and ZC Rubber America Inc.

Of these, however, only American Omni's testimony was submitted as a public document. All other submissions are listed as confidential. It's not clear why Prinx Chengshan was the only company to testify in person.

In addition, several tire manufacturers submitted testimony or questionnaire responses, all of which are shown as confidential: Bridgestone America Inc.; Continental Tire the Americas Inc.; Goodyear; Michelin North America Inc.; Sumitomo Rubber North America Inc.; and Yokohama Tire Manufacturing Mississippi.

None of the U.S.-based tire makers potentially impacted by an antidumping ruling have voiced an opinion on the possibility of duties.

In testimony offered by the USW, union local representatives from Bridgestone Americas Inc.'s plants in La Vergne and Morrison, Tenn., Goodyear facilities in Danville, Va., and Topeka, Kan., and Sumitomo Rubber North America Inc.'s plant in Buffalo, N.Y., testified that their companies have throttled back production of truck/bus tires at these facilities and inventories of the tires they are producing keep growing on a daily basis.

Kevin Johnsen, chair of the USW's Rubber & Plastics Industry Conference, testified that based on data from the U.S. Tire Manufacturers Association and the U.S. Department of Commerce, tires imported from Thailand grew to over 30 percent of the U.S. truck/bus tire aftermarket in 2022 from 20 percent in 2020, and that the share held by domestic producers fell to 28 percent from 45 percent over the same period.

The USW also pointed out that nearly all of the tires exported from Thailand were produced in factories that were built over the past decade by Chinese companies, including three that opened since the U.S. imposed elevated antidumping and countervailing duties on Chinese truck/bus tires in early 2019.

The USW claims Thai truck/bus tires are being dumped in the U.S. at margins up to 47.8 percent.

The ITC said the agency's commissioners plan to vote on the USW's petition on Nov. 30 and report their findings to the secretary of the Department of Commerce by Dec. 1. That decision will be made public by Dec. 8.

Parties that submitted testimony or other data on this matter have until Nov. 13 to file updates or corrections to their submissions or any post-hearing briefs.