Tire industry is being transformed by "double reverse" "big stick" and "world tire factory" in the US

Recently, the Chinese tire industry has encountered “double sticks” of sanctions against the United States. The tax rate on some American tires has increased to more than 100%. The Chinese tire industry, which is known as the “world tire factory”, has reached the crossroads of industrial transformation.

On the 27th, local time, the US International Trade Commission ruled that the passenger car and light truck tires that China exported to the United States caused substantial damage to the U.S. industry, which means that the U.S. will officially impose punitive anti-dumping measures on such products exported by China. Countervailing duties.

According to the results of the final ruling announced by the US Department of Commerce, the affected Chinese tire manufacturers will be subject to anti-dumping duties of 14.35% to 87.99% and counter-subsidy taxes of 20.73% to 100.77%. After the two tariffs are superimposed, some companies enter the U.S. market and must pay a tariff that is more than one times the price of the product.

This is the second time that the United States has initiated trade remedy measures against China's auto tire products. In 2009, the United States imposed an ad valorem special tariff of 55%, 45%, and 35% on China's passenger-car and light truck tires for three consecutive years on the grounds that Chinese tires disrupted the US market. After the expiry of this round of punitive tariffs, the U.S. Steel Workers’ Union believed that China’s tire exports to the United States had rebounded significantly, which may undermine the interests of US tire companies. In June 2014, they filed a “double reverse” application.

The person in charge of the Trade Relief and Investigation Bureau of the Ministry of Commerce said in a statement that the case has been highly concerned by the Chinese government and the tire industry. The US International Trade Commission’s view of the customer and the fact that the tire industry in the United States is in good operating conditions have resulted in a definite damage ruling, which will impose anti-dumping and countervailing duties on Chinese-origin tires for export to the United States. The U.S. decision will seriously damage the export interests of the companies involved in the case. The Chinese tire industry is strongly dissatisfied with the US ruling, and the Chinese government has repeatedly expressed serious concerns to the US to clarify its position and will safeguard its rights and interests in accordance with the WTO rules.

In fact, the United States has always been an important market for Chinese tire exports. According to data compiled by Zhuo Chuang Consulting, a research institute of bulk commodities, even in the 2010 to 2011, when the United States implemented the most stringent “China Security” case, Chinese tires still accounted for 20.5% to 26.5% of the US market. This time, the United States has implemented "double countermeasures" on my tires, which will directly affect the profitability of China's major tire exporting companies and their market share in the United States.

Insiders pointed out that the tariff of up to 35% imposed on the “Special Protection Case” a few years ago could be digested by domestic companies and foreign customers. This time, higher tariffs will be a fatal blow for Chinese tire companies. According to the statistics of the China Rubber Industry Association, the United States’ “double opposition” involved a total amount of US$3.37 billion, which directly affected the employment of 350,000 Chinese tire industry workers.

“On the one hand, for Chinese companies, profits have certainly been squeezed; on the other hand, the tax rate has increased, and the sales price of our tires in the United States must also increase accordingly, which will result in a reduction in the volume of orders.” The relevant person in charge of the foreign trade market of the tire company told the reporter.

According to statistics from the Ministry of Industry and Information Technology, in the first half of the year, under the pressure of economic downturn, the demand for the Chinese tire market continued to be sluggish, and tire exports were affected by the US “double reverse” case investigation initiated in 2014, and the industry’s average operating rate was about 60%. , a year-on-year decrease of more than 10%, the market price has dropped sharply, and there has been a situation where “quantitative price falls”.

The industry believes that in the face of the year-by-year upgrade of international trade frictions, the transformation of China's tire industry is an inevitable choice.

At present, overcapacity, lack of brand, and core competitiveness are challenges facing the Chinese tire industry. According to statistics from Tire World Net, at present, there are about 550 tire manufacturing enterprises in China, with an average production of 1.6 million tires per year. There are numerous production companies, but the scale of production is generally small.

“Without core intellectual property, it is easy to be replaced, so it has repeatedly been rejected by exporting countries.” Liang Danni, an associate professor at Sun Yat-sen University Law School, said that getting rid of Chinese tires' “low price” and “low quality” labels has shifted their focus to high-tech content. The development and production of high value-added products, through the integration of resources, the active implementation of mergers and reorganizations, and the development of a number of large companies with brand advantages are the only way for the Chinese tire industry to get out of its predicament.

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