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Trade law decision by ITC over Chinese off-the-road tire imports applauded by U.S. industry

Tuesday, August 19, 2008 - 00:00
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Union workers and Titan Tire Corp. are cheering a recent anti-dumping ruling by the U.S. International Trade Commission (ITC) regarding off-the-road (OTR) tires imported from China.

By a 5-1 vote, the ITC declared that the controversial Chinese OTR imports destined for American farm, mining and construction vehicles are “causing material injury to the U.S. industry.”

This is the first case involving a tire or rubber product where the complexities of the U.S. “countervailing duty” or “CVD law” have been applied to China.

In June of 2007, Titan and the United Steelworkers of America (USW) – which represents tire plant workers in Illinois, Ohio, Iowa, Kansas and New York -- filed petitions protesting China’s OTR imports.

In June of this year, the U.S. Commerce Dept. determined that the Chinese government was unfairly subsidizing Chinese OTR tire producers with subsidy rates ranging up to 14 percent, with final dumping margins calculated to be nearly 210 percent.

Last summer, the ITC had preliminarily ruled that the domestic OTR tire industry is being materially injured by dumped and subsidized China imports. From 2004 to 2006, the volume of OTR imports from China increased 33 percent with a value of $339.9 million in 2006.

The ITC last week officially affirmed its earlier stance. Final anti-dumping and CVD orders on the imports will be issued by the Department of Commerce at a later date. It will likely require the posting of cash deposits equal to the dumping and subsidization related to the individual companies involved.

The ITC determination “proves China cheats and that U.S. trade law enforcement is an important tool that will help level the playing field for U.S. workers by requiring Chinese tire imports to be priced fairly,” says USW President Leo W. Gerard. “This case shows the importance of vigorous enforcement of our trade laws as a first line of defense against unfair trade practices that harm American industries and jobs. The ITC vote of 5-1 reveals how egregious China’s import violations of fair trade rules really are.”

Since preliminary import duties were imposed in these cases last December and again in February, the U.S. industry has been revived, according to Maurice M. Taylor Jr., chairman and CEO of Titan International, Inc. As the market was rebalanced, imports from China declined, and production in the U.S. of tires in all OTR size ranges increased, he reports.

“I am glad that the system has worked and the Chinese are no longer permitted to flood the U.S. market with dumped and subsidized OTR tires,” says Taylor.

The ITC’s decision “is an exciting outcome for working men and women across the country. It proves that many people are hurt by unfair trade practices, and shows that our trade remedy laws are effective in combating unfair foreign trade practices for U.S. industry and its workers,” he notes. “A level playing field has been restored in our OTR tire market, and the harm caused to the U.S. industry by Chinese producers will now hopefully be corrected.”

Taylor explains that “our industry had been losing market share to imports from dumped and subsidized Chinese exports, which undermined jobs, profits and competitiveness of U.S. producers.”

Chinese imports of OTR tires surged by 75 percent from 2004 to 2007, jumping from about 1.8 million tires to 3.2 million last year, according to Stewart and Stewart, the USW’s Washington trade counsel. The law firm contends that lost jobs, diminished production and sinking shipments from U.S. tire plants were the direct result of the illegal Chinese imports.

“Union workers at the Freeport plant are very excited about the outcome this trade enforcement action provides by shoring up job security in our craft,” notes Steven Vanderheyden, a maintenance worker at Titan’s OTR factory in Freeport, Ill. and president of USW Local 745 representing 650 tire employees. “Building the large tires for agricultural and mining equipment is physically heavy and demanding, but if fair trade laws are followed, we can compete.”

“We are proud of fighting for trade fairness with Titan Tire, and we believe American tire workers will now have a measure of future job security – at least for those who make OTR tires,” says Ron Hoover, USW international vice president for rubber industry bargaining.

The USW represents 70 percent of the domestic OTR tire makers, with workers employed at Titan plants in Freeport; Des Moines, Iowa; and Bryan, Ohio. The USW also represents more than 4,000 workers who make OTR tires for Bridgestone Firestone in Des Moines and Bloomington, Ill.; Denman Tire in Leavittsburg, Ohio; and the Goodyear Tire & Rubber Co. in Topeka, Kan. and Buffalo, N.Y.

For more information, visit www.titan-intl.com or www.uswa.org.

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