The issue of importers allegedly dumping tires in the U.S. at unfair prices has been a hot topic for more than a decade, and 2020 was no different.
This time the main target was imports of passenger and light truck tires from South Korea, Taiwan, Thailand and Vietnam that were accused of being sold in the U.S. at less than fair value.
The United Steelworkers union filed antidumping and countervailing duty petitions May 12 with the Department of Commerce and the International Trade Commission. It alleged dumping margins on these types of tires as high as 217 percent for Thailand, 195 percent for South Korea, 147 percent for Taiwan and 33 percent for Vietnam.
In its petitions, the USW included claims of "numerous" government subsidies benefiting Vietnamese tire producers, including loans, tax breaks and grants.
Passenger and light truck tire shipments from the four countries totaled 85.3 million tires in 2019—up almost 20 percent from 2017—equaling 38 percent of the U.S. aftermarket for those products, according to data from the Commerce Department. The imports for last year were valued at $4.4 billion, nearly 32 percent higher than 2017.
The ITC collected thousands of pages of testimony and supporting documents during late May and early June from the USW, tire makers and importers, each trying to make its case in the dispute.
The Steelworkers presented statements from the presidents at seven USW locals at U.S. facilities the union claimed were impacted the most by the low-cost imports. They told of how production at their factories soared in 2015-16 when higher duties were enacted against passenger and light truck tires imported from China.
But the union said that as those imports were transferred to other lower-cost locations, particularly in Thailand, production at the U.S. facilities in question dropped sharply, as did employment. The USW had a bipartisan group of 11 senators representing seven states with tire factories supporting them, as the politicians wrote to the chair of the ITC, asking that the USW's petition be given "full and fair consideration."
Those testifying in opposition included several tire makers and a large group of importers. Richard Smallwood, president and CEO of Sumitomo Rubber North America Inc., said the import supply lines bridge the gap between tire demand in the U.S. and domestic capacity.
Hankook Tire America Corp. also gave testimony to oppose the petitions. Hankook argued that imports from its parent in South Korea shouldn't be lumped in with other imports because tires from that nation don't compete against the low-cost imports because they are higher quality and have higher-tier brand recognition in the states.
Importers told the ITC that the tires they import don't pose a threat to U.S. tire manufacturers, as there is not nearly enough capacity at U.S. tire plants to cover the shortfall if these imports were not available.
In mid-July, the ITC determined that the imports in question "significantly undersold" similar tires produced domestically. That conclusion and other economic factors led the ITC commissions to move forward with antidumping countervailing duty investigations.
As part of the process, the Commerce Department agreed to delay until Dec. 29 the deadline for publishing its preliminary determination as to whether the P/LT imports from South Korea, Taiwan, Thailand and Vietnam are indeed being sold at less than fair value.
Commerce agreed to delay this deadline by 50 days in response to a request from the USW, which said it believes Commerce would be unable to gather "complete responses and sufficient information" by the original deadline of Nov. 9 due to the "complexity" of gathering the information needed.
By agreeing to delay the deadline for publishing its preliminary determination, Commerce also automatically pushed back the date for a final determination by the same number of days, or to mid-March from late January.
Other trade cases
The Commerce Department has determined that elevated import duties imposed in 2015 on certain consumer tires imported from China should remain in place, according to the department's expedited "sunset" review of the duties.
The U.S. government is obligated to conduct "sunset" reviews of import duties every five years because of language in the Uruguay Round Agreements Implementation Act, approved in late 1994 and to which the U.S. is a signatory.
Commerce also found that South Korean exporters dumped emulsion SBR in the U.S. from September 2018 to August 2019. The decision means the companies now are subject to import duties of 44.3 percent.
The Enforcement and Compliance unit of the International Trade Administration issued a final ruling Oct. 23 in the case after coming out with preliminary findings July 1.
A total of seven South Korean companies are impacted by the ruling, including LG Chem Ltd., Daewoo International Corp., Hyundai Glovis Co., Kukje Trading Corp., Kumho Petrochemical Co. Ltd., Sungsan International Co. Ltd. and WE International Co. Ltd.
