Chinese tire companies are inevitably involved in both the familiar and unfamiliar Sino-U.S. tyre special protection case.
Familiarity is due to the fact that the United States has filed six special safeguard investigations against China since 2002. However, the six special security investigations all ended with the failure of the United States. Chinese companies did not suffer any damage.
Unfamiliar because the case occurred at the beginning of the Obama administration. It can be regarded as a test of the Obama administration's attitude and practice on the "survey of special safeguards" and even the "touchstone" of Sino-U.S. trade relations.
Domestic companies are seriously affected
On June 29, the U.S. International Trade Commission (ICT) proposed to impose special tariffs of 55%, 45%, and 35% on the Chinese passenger car and light truck tires for three consecutive years on the ground of Chinese tires disrupting the U.S. market. It will be approved by the Obama administration before September.
In accordance with Article 421 of the Trade Law, the North American Iron and Steel Workers' Federation requested that the number of Chinese tires exported to the United States be reduced by more than half, that is, from 46 million last year to 21 million, and urged that Obama impose restrictions on the import of Chinese tires.
At present, the Ministry of Commerce of the People's Republic of China has sent people to the United States to respond. The final result will be announced in mid-July.
According to an announcement by the Ministry of Commerce, the U.S. International Trade Commission’s recommendation lacks factual basis and sends the wrong signal of trade protectionism to the United States and the international community. It creates trade frictions against Chinese products and creates a steady development of China’s foreign trade environment and Sino-U.S. economic and trade relations. Negative impact. The Ministry of Commerce also stated that China reserves the right to resort the case to the WTO dispute settlement mechanism.
"If the proposal is implemented, the company's exports will be reduced by nearly 50%. In the past few days, we have been communicating with the US distributors to discuss this issue." On July 4, Wang Lingmei, the Overseas Marketing Director of Delicate Group, told reporters.
As one of the top 20 tire manufacturers in the world and one of the top three tire manufacturers in the country, half of the products of the Linglong Group are used for export. The US market accounts for 40% of its total export value, and its annual export volume reaches 250 million yuan. Delicate exports include all-steel tires, semi-steel tires, and high-performance tires. This "special protection case" only involved products that accounted for 70%-80% of its exports to the United States.
It is understood that the “special protection case†is aimed at the types of vehicle tires for passenger cars and light trucks, among which passenger vehicles involve a large number.
“Aeosaurus tires are mainly light trucks. Although we are not affected at present, the implementation of this proposal will have an impact on the company’s future production and operation.†Lu Baoping, head of the import and export department of Fengshen Tire Co., Ltd. The reporter said. Not long ago, Fengshen Tire announced that the company has a new production plan for passenger car tires.
Starting in 1998, Aeolus Tire began exporting to the United States, and its export value reached nearly 90 million U.S. dollars at the peak of 2006. After several ups and downs, Fengshen Tire's control of the market and its mastery of US dealerships gradually matured.
"The number of varieties involved in the case last year was about 10,000, and the amount was about 1.5 million US dollars. If the proposal is not implemented, it is expected that this year's exports will be flat or slightly higher than last year; if implemented, it is difficult to guarantee." Lu Baoping said .
It is understood that at present, China's annual export of tires accounts for more than half of the total output (550 million pieces), and sales in North America account for 1/4 of the total domestic tire production. According to 2008 production calculations, if China's half of American tire production is cut, it means that China will have nearly 12% of its remaining tire capacity, which means that there will be a huge surplus of 66 million.
Disagreement within the United States
According to the law, the Obama administration will make a decision when the appeal period expires in September. This trade lawsuit is the first time that President Obama has faced a major trade case with China since he took office. This is of particular concern.
Unlike previous cases, none of the prosecutors of the Sino-U.S. Tyre Special Protection Case was a producer. The American Steel Workers’ Association, which represents the interests of workers, provoked the case.
There are many different voices between industry and business. It is understood that the American Iron and Steel Industry Association, the American Rubber Association, and many U.S.-related companies do not recognize existing claims. The US Tire Industry Association stated in a statement that its members use tire products imported from China in large quantities to meet market demand. If we forcefully cut imports from China, we will only force companies to choose similar products from other countries. This will not only not benefit U.S. manufacturing, but will also adversely affect the development of U.S. consumers and the auto industry.
Wang Guomei introduced to reporters that the US tire market has a graded sales. A Tire is a tire with a good brand, high price, and high profit, such as Goodyear and Michelin tires. A Tire II is an intermediate grade. There is no brand appeal for the Tire Tire. The price is cheaper. Korean brand; three-tier tires are the most common economic types of tires, and Chinese tire sales to the US mainly fall into this category.
Chinese tires entered the US market and began to show significant improvement in 2001 and 2002. At this time, the US tire industry is in the moment of industrial adjustment and upgrading.
“What we are doing now is a kind of product that American companies are not interested in. China’s tires appear in the US market in a fair competition, but they fill the market space left by the exit of US domestic industries. The low prices of Chinese products are due to our The cost of raw materials and labor costs are low.†Wang Guomei’s words tell the views of most Chinese manufacturers.
“In the economic crisis, many companies have tight cash flows and the demand for economical tires is even greater. 99% of Linglong Group's dealers in the United States do not want this proposal to pass because the market needs various grades of products.†Wang Guomei introduced, the company’s Many customers formed a spontaneous alliance of tire agents and are applying to the U.S. government.
Chinese enterprises should actively respond
According to industry sources, Chinese companies have long been familiar with and paid more attention to anti-dumping investigations and countervailing duties in overseas anti-dumping measures. However, they have not paid much attention to the “special surveyâ€. Because there is still no company or industry that suffered losses due to special security investigations.
Although the American market is not the mainstay of Aeolus Tire's business, it only accounts for three-thousandths of its total sales, but the company is also actively involved in the response. At the end of April, Fengshen Tire participated in the investigation organized by the China Rubber Association, the Minmetals Import and Export Chamber of Commerce, and the Fair Trade Bureau of the Ministry of Commerce. At that time, the responsible person Lu Baoping participated in the specific work of the corresponding questionnaire survey.
“We have been tracking this matter and looking at the details from the US customers. In addition to completing the questionnaire, some companies actively participated in the defense. But at present, our US customers and lawyers are not sure about the outcome, and the prospects are uncertain. "Lu Baoping said.
FengShen Tire Import and Export Minister Guo Shuangxing said: “The role of communication with industry associations is not much now. We can only hope to rely on the active efforts of the government.â€
If this proposal is implemented, the US dealers will also face the issue of quotas. Exquisite tires will reduce their exports by nearly 50%. "If there is a half-year or one-year transition period, it is not a problem for us. We can transfer the corresponding orders to the markets of the Middle East, Europe and Africa. If the implementation is urgent, we must adopt other emergency plans." Wang Guomei said.
View related topics: China and the United States tire special security case
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