The Department of Commerce Issues Countervailing and Antidumping Orders on Truck and Bus Tires from China

The two orders issued by the Department of Commerce is scheduled to be published in the Federal Register on February 15th 2019. On or after the date of publication in the Federal Register, the DOC will instruct CBP to require, at the same time as importers would normally deposit estimated duties on this merchandise, cash deposits for each entry of subject merchandise equal to the rates noted in each order. These instructions suspending liquidation will remain in effect until further notice.

– The countervailing duties are set at three rates: 20.98%, 42.16%, and 63.34%, depending on the manufacturer.

– The estimated weighted average antidumping rates are set at either 9% or 22.57%, depending on the manufacturer. 

Click below to download:

ITA Antidumping Duty Order

ITA Countervailing Duty Order

Millions of passenger, commercial truck and otr tire casings are retreaded each year, with total dollar savings in the billions and it’s good for the earth!

Retreading is used in many industries including trucking, mining, construction, shipping, cargo handling, air transportation and more. If you are buying or selling commercial tire casings, let CasingSource.com do the heavy lifting.

U.S. International Trade Commission reverses opinion on truck and bus tires from China

A message from RetreadInstead.net:

Madison, TN. (February 04, 2019)

Dear retread industry member, as you know back 2016-early 2017, the U.S. government conducted both an antidumping and a countervailing duty investigation onimported truck and bus tires from China.  While significant dumping and subsidies were found by the U.S. Department of Commerce, the U.S. International Trade Commission, in a 3-2 vote, found that the domestic industry was not materially injured or threatened with material injury.  As a result, no antidumping duty or countervailing duty order was entered. Imports from China soared in 2018.

The United Steel Workers Union, the petitioner in the original investigation, filed a judicial challenge in the U.S. Court of International Trade in early 2017.  The court issued a decision last fall and remanded the final determination of the International Trade Commission to it to reconsider one of the issues in its original determination.  The agency was required to submit its remand determination back to the court by January 30^th, 2019.  The remand determination is a 3-2 affirmative determination, which is obviously very good news.

However, the matter is now back before the U.S. Court of International Trade for additional briefing based on the remand determination with a decision not likely till summer at the earliest.  If the court affirms the remand determination and issues a final judgment in the matter, then the Commerce Department should issue antidumping and countervailing duty orders and start collecting cash deposits on imports from China.  This would be true even if any party takes an appeal to the U.S. Court of Appeals for the Federal Circuit.  If the court has problems with one or more parts of the remand determination, then the court will send the case back to the US International Trade Commission for further review/consideration.

We obviously have a keen interest in seeing imports from China traded fairly as the imports affect retreaders as well as new tire producers. This latest development is an important one but will not result in any change in the marketplace until there is a final decision by the U.S. Court of International Trade. We are monitoring developments and will advise of any important events.

We should continue to update our Senators and Representatives on the importance to the retread market, of the need to ensure that US trade remedy laws remain strong and effective, and that it is to the public’s interest to have political appointments reviewed promptly and, if not rejected, confirmed that all government agencies have the personnel needed to function at full workforce levels.

This is true at USDOC (Assistant Secretary for Enforcement and Compliance has been pending for more than a year and has been renominated since the start of the new Congress), at USITC (two nominees from the 115th Congress have been renominated in January 2019), and in the relevant courts (two nominees for the US Court of International Trade have been renominated in January 2019).  It is helpful to us to have government fully staffed. Filling vacancies promptly this year is important.

ITC Votes 3-2 Against Tariffs On Chinese Truck & Bus Tire Imports

The ITC vote means that the U.S. Department of Commerce will not issue anti-dumping and countervailing duty orders on the products from Chinese truck and bus tire manufacturers and importers.

The initial study, which began in March of 2016 and was filed under investigation numbers  701-TA-556 and 731-TA-1311 located in publication 4601 of the United States International Trade Commission sought to determine if “On the basis of the record developed in the subject investigations, the United States International Trade Commission (“Commission”) determines, pursuant to the Tariff Act of 1930 (“the Act”), that there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of imports of truck and bus tires from China, provided for in statistical reporting numbers 4011.20.1015 and 4011.20.5020 of the Harmonized Tariff Schedule of the United States, that are alleged to be sold in the United States at less than fair value (“LTFV”), that are allegedly subsidized by the government of China.”

The investigation was started because on January 29, 2016, the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Pittsburgh, PA filed a petition with the Commission and Commerce, alleging that an industry in the United States is materially injured or threatened with material injury by reason of LTFV and subsidized imports of truck and bus tires from China.

Union officials were disappointed with the decision by the Commissioners.  USW International President Leo W. Gerard released a statement saying “The ITC commissioners made a huge mistake, while the Department of Commerce identified subsidies of up to more than 60 percent and dumping of up to almost 23 percent, the ITC failed to support relief for the injured workers.”

ITC Commissioners David B. Johanson, Meredith M. Broadbent and F. Scott Kieff voted against a finding of material injury, Rhonda K. Schmidtlein and Irving A. Williamson voted in favor. Dean A. Pinkert did not participate in the vote.

Because of this ruling, commercial tire dealers and retreaders in the U.S. will have to realign their go-to-market strategies for pricing new and retreaded tires for their customers.  It was recently announced that many new tire manufacturers are planning price increases for 2017.

Tire Retreading Facts & Information

In the early twentieth century America’s unpaved and hazardous roadways were incredibly rough on the pneumatic tires running on bicycles, motorcycles, automobiles and commercial trucks.  If these tires were not damaged prematurely, they were still lucky enough to average about 1,000 miles before wearing out.

One of the first methods invented for extending the life of tires was the process of retreading the casings.  Strips of uncured rubber were added to the casing and then vulcanized, but this technique was unreliable because only parts of the casing could be cured at one time which led to unequaled curing and a defective retread.

In 1912, Marion Oliver developed and patented a tire retreading method known as pre-cure. This process involved buffing the tire to the fabric and then placing a pre-cured tread on top.  This process has become the most widely used and accepted practice of retreading tires to this day.  The pre-cured tread, because of advanced proprietary rubber compounds and the lower curing temperature needed to cure, can average just about the same mileage as a new tire.  Today there are over 650 retread shops in the U.S. and 90%-95% of them use the pre-cure process.

With the continued improvement in today’s technologies for inspecting tire casings for retreading, the overall failure rate has dramatically declined and the safety of a retreaded tire is fairly comparable to a new tire.  Most of the same types of machinery are used for each.  The economical and environmental benefits of retreading are more important than ever, with fleets and mining operations pressed to reduce costs as well as comply with environmental regulations enforced by the Federal Government.

RETREADING IS GOOD FOR THE ENVIRONMENT

• Tires are a petrochemical commodity, because of this it takes about 22 gallons of oil to produce a commercial truck tire
• It only takes about 7 gallons of oil to produce a commercial truck tire retread
• It could take up to 500 gallons of oil to produce one OTR tire
• Buffed rubber dust is recycled into many things such as playground surfaces, rubber welcome mats and alternative energy
• Retreading reduces carbon dioxide emissions as well as other harmful and toxic substances
• Tread rubber manufacturers have many designs that are now SmartWay verified

RETREADING IS ECONOMICAL AND SAFE

• Nearly 90% of all aircraft in the world use retreaded tires
• The U.S. Federal Government has mandated that all government fleets use retreads
• Millions of casings are retreaded every year, saving billions of dollars across many industries such as trucking, mining, construction, air transportation, cargo handling and industrial applications

Higher Tariffs Should Help Retreaders

Imported commercial truck tires (particularly from China) have disrupted the U.S. market over the years because of a dramatically lower price versus such major brands as Michelin, Bridgestone and Goodyear.  Because of this, fleet managers and end users were forced to decide if the benefits of retreading were still a viable option or if just purchasing a cheap import and discarding the casing after a one-time use was more cost efficient.  In many cases the price of a cheap import was exactly the same or sometimes even lower than the price of retreading an existing casing.

According to a recent article from Modern Tire Dealer, the U.S. Department of Commerce reports that these imports have been on a dramatic rise with just over six million commercial truck tires imported in 2012 to almost ten million imported in 2015.

Source: Modern Tire Dealer

But with new laws enacted recently by the International Trade Commission the amount of imported Chinese truck tires actually decreased towards the end of 2016 and new data suggests that the anti-dumping and countervailing measures imposed will further reduce these imports in the years to come.

Now with these fair trade policies in place, U.S. retreaders should see an increase in overall production with a returned /renewed focus in retreading quality casings.

Ironically, these cheap imports may have had a lower initial price but studies have shown that the overall cost of ownership increased for fleet managers and end users because of the poor casing craftsmanship, lack of retreadability, sub-standard warranty and poor resale value.