Passenger and light truck imports from Thailand, South Korea, Taiwan and Vietnam have been subject to elevated antidumping duties ranging up to 98.44 percent depending on the country of origin, according to the Department of Commerce's preliminary ruling Dec. 30 in the case filed originally in May 2020 by the United Steelworkers union.
U.S. Customs and Border Protection has been collecting cash deposits on such imports since then at rates proscribed in the ruling. Commerce is scheduled to announce its final determinations in these cases on or about May 14.
As they pertain to companies in Thailand, the duties are: LLIT Thailand Co. Ltd. (Linglong)—22.21 percent; Sumitomo Rubber (Thailand) Co. Ltd.—13.25 percent; all others—16.66 percent.
As for the situation last year, Mexico advanced to No. 4 among countries exporting tires to the U.S. with a 1.5 percent increase in the value of said shipments, to $1.06 billion. Japan fell to No. 5 as the value of its exports to the U.S. fell 16.8 percent to $1.04 billion.
Overall, the value of imports slipped 9.3 percent to $13.5 billion, according to Tire Business' analysis of U.S. Department of Commerce data.
In terms of unit imports, Thailand is a solid No. 1 in passenger, light truck and medium truck/bus tires, as well as a strong No. 2 in a number of other categories such as farm and/or OTR tires.
The balance of trade in the tire industry narrowed by 5 percent to $9.36 billion as the value of exports grew slightly to $4.1 billion, according to Tire Business' analysis of Commerce data.
Of the U.S.'s major tire sector trading partners, the U.S. held a surplus last year with two nations—Mexico and Canada, at $138.1 million and $85.9 million, respectively. Both are measurably smaller versus 2019.
These two nations represented 63 percent of the U.S. tire industry's exports by value, the data show.
Mexico's exports to the U.S. totaled $1.06 billion last year, while the U.S. exported $1.15 billion worth to Mexico.
Canada was the No. 1 export destination in 2020 for U.S.-made tires at $1.43 billion, down 15 percent from 2019. Imports from Canada were valued at $1.29 billion, down 18.4 percent from 2019.
The next largest export destination was Australia, which took in $344 million worth of products from the U.S., down only slightly versus 2019.
China, which held the distinction of being the U.S.' largest trading partner in the field of new tires for the better part of the past decade, has now fallen to No. 6, as the value of its imports fell below $1 billion, down 19 percent from 2019 to $976.2 million.
In the passenger tire category, imports from Thailand fell 3.8 percent to 35.9 million units, but this total is more than two-and-half times that of South Korea (14.9 million units), the No. 2 nation on the list and equal to over 25 percent of all car tire imports.
Tire Business' analysis of the Commerce Department data shows that Thailand and China have essentially swapped positions among countries exporting passenger tires to the U.S. since the U.S. imposed elevated import duties on such tires from China.
Since then, imports of car tires from China have dropped to 2.48 million units last year from 50.4 million in 2015. During that same period of time, imports from Thailand have tripled to 35.9 million units last year from 11.4 million in 2015. (See graph on page 22.)
Thailand's ascendancy to the top of this category is linked to the opening of four plants by Chinese tire companies with over 30 million units of annual passenger/light truck capacity in that country since 2015:
- General Science Technology Co. Ltd. (JGST)—car and truck/bus tire plant in Rayong, opened December 2019; 6 million units/year capacity;
- Qingdao Sentury—car/light truck tire plant in Rayong, opened in 2015; 5 million units/year capacity;
- Shandong Linglong—car/light truck tire plant in Bangkok, opened in 2013; 13.2 million units/year capacity;
- Zhongce Rubber Group—car/LT and truck/bus tire plant in Rayong, opened in 2015; 11 million units/year capacity.
In all, 21 tire companies are active in Thailand, including seven of the majors—Bridgestone Corp., Cheng Shin Rubber, Continental A.G., Goodyear, Michelin, Sumitomo Rubber Industries Ltd. and Yokohama Rubber Co. Ltd.—plus seven Thai-based tire makers, such as Deestone Corp., Hihero Co. Ltd., Otani Tire Co. Ltd. and Vee Rubber Corp. Ltd.
In addition, Double Coin Holdings Ltd. opened a truck and OTR tire plant in Thailand in 2017 and Prinx Chengshan Tire Co. Ltd. commissioned a truck/bus tire plant in Chonburi, Thailand, in March 2020 with an annual capacity of 800,000 units;
Thailand's lead over No. 2 South Korea widened as imports from Korea dropped 13.6 percent. Likewise No. 3 Mexico narrowed the gap to South Korea as Mexico's shipments fell just 1.6 percent.
The declared customs value of imported passenger tires last year was $48.75, down $2.52—or nearly 5 percent—from the 2019 value, the data show. Among the 10 largest countries on the list, values ranged from $34.85 for Vietnam to $61.95 for Mexico.
In light truck tires, No. 2 Canada narrowed the gap to top dog Thailand with 12 percent higher shipments versus Thailand's 1.8 percent increase—3.94 million units versus 7.81 million.
Vietnam, South Korea and Mexico rounded out the top five with imports of 2.84 million, 2.05 million and 2.05 million units, respectively.
Overall, imports of light truck tires climbed 4.5 percent to 27.9 million units, the Commerce Department data show.
The average declared customs value of an imported light truck tire slipped slightly to $75.41.
Average prices among the 10 largest importing nations ranged from $55.37 (Vietnam) to $95.06 (Japan).
In the medium/heavy truck/bus tire category, Thailand was the clear No. 1 with shipments of 4.77 million units, up 3 percent over 2019. Thailand's total represents 36.2 percent of all imports in the category, up from 31 percent in 2019.
China, No. 1 in this category from 2003 through 2018, retained the No. 2 spot last year despite a 56.6 percent drop in shipments, to 1.38 million units.
The drop reflects the imposition of antidumping and countervailing duties in February 2019 by the U.S. in truck/bus tires from China. The duties range from 20.98 percent to 63.34 percent countervailing and 9 percent to 22.57 percent antidumping.
Japan, Canada and Vietnam were grouped closely together at Nos. 3, 4 and 5 with shipments of 1.27 million, 1.26 million and 1.24 million units, respectively.
The relative strength of the import sector last year was in stark contrast to the performance U.S.-based tire makers, and resulted in a marked increase in the import share of the U.S. aftermarket.
Domestic production fell by double-digits last year in all key categories, including a 25.5 percent drop in passenger tire output, reflecting the weeks and even months of suspended manufacturing at most U.S. tire plants during March, April and May as companies dealt with the fallout of the COVID-19 pandemic.
The production fall-offs—light truck and medium truck tire manufacturing was down 18.5 percent and 21 percent, respectively—were significant enough that the level of production was the lowest in decades, according to USTMA data and research by Tire Business.
For passenger tires, production of 91.2 million units was the lowest output since 1955.