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Truck tire tariffs in Europe reduce Chinese imports by 88%

By John Stone

It has been a long time coming, and the speculation around its effect on the European tire market has been speculative and widespread. But finally, the European Union (EU) in Brussels has announced its long awaited “final” decision on the introduction of anti-dumping tariffs to be imposed on truck and bus tires, including retreaded tires, that are imported into the continent from China.

Regulation 2018/1579 came into effect on the 23rd of October, and right to the very end the EU kept all concerned guessing -- and even added a surprising final “twist in the tail” in this diplomatic saga. The EU increased the tariff levels almost across the board, which replaced the original retroactive tariffs between February and May of this year.

This latest and final ruling means that only Hankook Tire will have its tariff reduced to 42.73 euros (close to $48.53 in U.S. dollars) per tire, whilst other tire manufacturers, including Giti Tire, Aeolus

Tire, Guizhou Tyres, Prinx Chengshan Shandong Tire, Qingdao

Doublestar Tire, Sailun Jinyu Group, Shandong Hengfeng Rubber,

Shandong Huasheng Rubber, Shandong Jinyu Tire, Shandong Linglong,

Triangle Tyre and Zhongce Rubber Group, have now been hit with even higher tariffs, from 47.96 euros up to 49.31 euros per tire.

The EU has also decided to include the Chinese production facilities of leading global “A” brands, including Michelin (Michelin

Shenyang Tire), Bridgestone (Bridgestone Huizhou Tire), Pirelli (ChemChina) and Goodyear (Goodyear Dalian Tire), who also have been handed a tariff of up to 49.31 euros per tire.

Finally if all the above tire companies think they have been dealt a really raw deal, then spare a thought for Xingyuan Tire Group and

Gaungrao Xinhongyuan Tyre, who have been hit with a massive tariff of 61.76 euros per tire.

This confrontation with the import of Chinese manufactured tires into Europe and, indeed, other countries around the world has been going on for more than 18 months, and this final ruling has predictably bought the sale of Chinese imported truck and bus tires in

Europe to an almost complete halt as the tariffs imposed on the tires have made them so expensive and therefore completely unprofitable.

European tire wholesalers have been preparing for the possibility of tariffs being imposed throughout this year and trying to source out appropriate manufacturers producing in Europe or outside of

China, with Thailand suddenly becoming a new “hotbed” of tire production. However both in Europe and in some parts of Asia, tire production facilities have really struggled to cope with the additional demand for tires, which has inevitably led to a shortage of truck and bus tires.

This dramatic slowdown in tire production has had an immensely negative effect on the commercial tire market in every European country, and I have noticed that almost overnight advertisements in European magazines, both hard copy and digital, for commercial

The final EU tariffs apply only to truck tire production in China. There has never been any indication from the EU that passenger tires from China were or would be involved in the tariffs.

tires have disappeared. I have also spoken with the European distributors of several Chinese truck and bus tire manufacturers, and the general opinion is the ruling has effectively “killed off” most business in Europe in this market sector, at least for the moment.

It seems small commercial tires have now become totally unrealistic in price, and larger tires are not far behind. One distributor (who shall remain nameless) points out that affected Chinese producers are now frantically trying to divert production for Europe to their facilities outside of China, which are mainly in Indonesia, Thailand and Vietnam. And cranking up production levels takes time.

Another significant development has been the responsive action of the “A” brand manufacturers, which have instantly switched their production to second line brands that are manufactured outside of China. These tires are now being targeted by major European tire wholesalers as they are the cheapest alternative at the moment.

It is still too early to get a true measure of the real impact of the tariffs, but it is estimated that in the last few months, Chinese imports have decreased by 88% per month, which as I mentioned earlier has pretty much stopped this market dead.

It will be very interesting to see what happens next. Will the Chinese producers dodge around the tariffs by making their tires in other countries and stage a comeback in the market? Will China subsidize Chinese-based tire manufacturers to get around the tariffs? Watch this space!

John Stone has been working within the global tire industry for the past 27 years. In 2004 he launched his own consulting company, Sapphire Media Service, which caters to business media clients around the globe. Stone also writes for tire and automotive-related publications in Europe, South Africa and Asia.

Focus On Industry From Turkey to the U.S.

ORIENTE TIRE USA WILL DISTRIBUTE PETLAS CONSUMER TIRES

By Bob Ulrich

Petlas consumer tires are coming to the United States. And Gus Lima is the man responsible.

Lima, president of Oriente Triangle Latin America Inc., is also CEO of the Latin Expo Group LLC, which organizes several trade shows. He is responsible for bringing the Latin American and Caribbean Tyre Expo, Latin Auto

Parts Expo and North American Tire &

Retread Expo to life.

Despite his success as both an independent tire distributor in Latin America and trade show organizer, he s a y s h e h a s d r e a m e d o f distributing an exclusive line in

Lima said he wanted

someone who unthe U.S. Petlas derstands the U.S. Tire Industry market to run Oriente and Trade Co.

Tire USA. made that happen by offering its nearly full-line of passenger and light truck tires to Lima and

Marco Zigni, principals in the new Oriente

Tire USA LLC.

“It was on my bucket list,” says Lima, who will run the company out of Miami. “I feel there is room in the U.S. for a high-quality

European tire, a Tier 2.1 tire marketed at a competitive price. Petlas is produced in

Turkey, so the tires don’t have trade barriers into this country. It was the perfect storm for us.”

Thanks to expanded production, the plant, based in Kırşehir, Turkey, has enough capacity to supply the U.S. with a nearly full-line of passenger tires, including ultra-high performance, winter and run-flat tires. The light truck tire line covers segments from highway-terrain to 4x4 SUV.

“Key U.S. market LT/SUV sizes are scheduled to be introduced in 2019,” he says. Only larger sizes in the all-season passenger tire line and a mud-terrain tire are missing from the lineup; plans “are being formulated to introduce those tires to the market.”

“We are interviewing for a team to run the company in the U.S.... with our full support,” says Lima. His first hire was David

Halldane as sales director. Halldane, with more than 30 years of experience in the tire industry, will be in charge of market and sales development.

Petlas and Starmaxx agricultural and OTR tires will continue to be distributed separately by Petlas Tire USA LLC, which is located in Cheyenne, Wyo. But Lima says the two companies will work together when possible.

The PT741 Velox Sport is also available in runflat tire sizes.

A wide range of consumer tires From passenger and LT to 4x4 and SUV

Oriente Tire USA LLC will be distributing the following Petlas consumer tire lines in the U.S.:

PT311-Elegant PT525-Progreen PT711 Velox Sport PT731 Velox Sport W601 Snow Master Passenger tires PT515-Imperium PT535 Imperium PT721 Velox Sport PT741 Velox Sport W651 Snow Master

PT555 Multi Action (four season)

PT411 Explero A/S PT431 Explero H/T

PT825 Full Power PT835 Full Power PT925 Full Grip (MS winter) PT945 Full Grip (winter)

4x4 and SUV tires PT421 Explero A/T W671 Explero (MS winter) Light truck radial tires PT825 Full Power Plus PT875 Advente MS PT935 Full Grip (winter)