Tire industry faces three scenarios with EU tariff ruling on China

LONDON—The European tire industry is facing a range of scenarios ahead of the deadline for an appeal against a recent European Union court ruling annulling antidumping and countervailing duties on Chinese truck and bus tire imports.

The European Commission has until mid-July to appeal, with three main options on the table, said Yorick Lowin, managing director of German tire retail association BRV, which also runs EU tire retreaders' association BIPAVER.

The first option, said the industry official in a written statement to European Rubber Journal, is for the European Commission to lodge an appeal against the judgement at the European Court of Justice.

In that case, the annulment ruling would be set aside until the appeal is settled, duties continuing to apply until then, said Lowin.

The second option is for the commission to accept the judgement and initiate a compliance investigation to correct any errors with its original imposition of tariffs and duties in 2018. The trade measures would then re-imposed, likely at a reduced level.

The third option, said Lowin, is for the commission to accept the judgement and not re-impose the measures if they believe that the errors identified by the court could not be rectified.

"Up to now, the commission has not made a decision yet," said Lowin, noting, however, that the second option was the most likely of the three outcomes.

If that was the case, he said, the European Commission could instruct customs authorities not to repay any duties until the end of any new compliance investigation.

The commission also could impose "a registration of imports of Chinese tires with a view to collect retroactively duties when their new level is recalculated," Lowin further pointed out.

"In case of registration, importers are informed by the customs authorities in the member states that they may revert at a later point to collect duties up to the original level of the duties."

And, if the commission were to re-implement the duties, the European tire industry would be able to request an extension to the antidumping and anti-subsidy measures in 2023.

Lowin said that the court ruling did not have an "immediate big effect" on the EU tire industry, as rising costs for materials and transport from Asia were driving up prices for tire imports from China.

But, he noted, "once these costs go down again, we would have a similar situation on the European retreading market as we had in 2016-2018."