While the tires in question in the latest antidumping tariffs battle represent some of the lower-tier business in the U.S. tire industry, that doesn't mean the stakes aren't high.
The passenger and light truck tire imports from South Korea, Taiwan, Thailand and Vietnam that are being debated represented more than 85.4 million tires sold into the U.S. replacement market in 2020 with a total value of nearly $4 billion. Those numbers represent almost exactly half the number of tire units imported in those categories last year, but only roughly 44 percent of the value.
They also potentially represent thousands of manufacturing jobs, either here at domestic factories in the U.S., or at lower-cost facilities operated in the Asian territories.
Thus far, the U.S. Department of Commerce has weighed in, saying in its final determination May 24 that—for the period from April 1, 2019, to March 31, 2020—companies from those Asian lands had undercut domestic competition. The DOC further determined that antidumping duties of between 13.25 percent and 98.44 percent should be enacted.
Commerce made its ruling public just one day before opposing sides testified at an International Trade Commission virtual hearing, pleading their cases. The ITC is expected to decide by mid-July whether to accept, reject or alter Commerce's decision.
The United Steelworkers basically stood alone in pushing for the antidumping duties, supported by testimony from a handful of congressional representatives whose districts include tire plants represented by the union. In recent years, the USW has taken on the battle of what it says is lobbying for the U.S. tire industry. While organizing victories in the tire industry have been hard to come by, it has stepped up efforts over the last decade-plus to push for investigations into imports that it says are being sold for less than fair value.
While the union represents 12,000 workers at eight consumer tire factories in the U.S. that make products that compete with these imports, it says when it succeeds in these cases, the companies and workers where it isn't the bargaining agent also benefit from these victories.
The USW's case is predicated strictly on jobs and money. It claimed the imports in question undersold comparable domestic tires 90 percent of the time and gained more than 5-percent market share during the year being investigated, causing domestic firms to see profits drop and slash capital spending.
It angers USW leaders that it has to take the lead in bringing these cases, while companies operating the plants it's fighting for—including Goodyear, Cooper Tire & Rubber, Michelin and others—sit on the sidelines without taking a position.
Those tire companies that did testify adamantly oppose the duties. Richard Smallwood, president and CEO of Sumitomo Rubber North America Inc., has been one of the most vocal witnesses in such hearings in the past, and this one was no different. The executive said domestic tire makers can't service all tire segments and are retooling factories for higher-value product lines. He added that the importers servicing markets that U.S. manufacturers ignore shouldn't be punished for that, and even if the supply from these four countries is cut off, the multinational firms would find other supplies.
How the ITC decides on what many call a small piece of the U.S. market still will have big ramifications for the parties involved.