Industry News
USW seeks new tariffs on PLT tires ‘RENEWED SURGE IN IMPORTS’ VALUED AT $4.3 BILLION
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he United Steelworkers (USW) union has filed anti-dumping and countervailing duty petitions targeting passenger vehicle and light truck tires made in South Korea, Taiwan, Thailand and Vietnam. According to Modern Tire Dealer statistics, these four countries exported 85.3 million consumer tires to the United States in 2019, with more than half of that total coming from Thailand. The tires from those four countries accounted for 33% of all PLT tires shipped in the U.S. replacement market last year. The USW says the value of the imported tires from these four countries has increased by 22.1% since 2017. The 71.1 million PLT tires imported from Korea, Taiwan, Thailand and Vietnam that year were worth $3.596 billion. By 2019, their value had increased to $4.391 billion. The USW additionally filed a countervailing claim in the case of tires from Vietnam, alleging that tires made there and shipped to the U.S. are benefitting from government subsidies at home. In a statement dated May 13, a day after the petitions were filed with the U.S. Department of Commerce, USW President Tom Conway said, “Even though demand for (passenger and light truck) tires increased, domestic producers were still forced to grapple with reduced market share, falling profits and lost jobs.” If this feels like a repeat of the USW’s campaign that began in 2014 to impose tariffs on PLT tires from China, that is by design. The union’s attorneys cited the success of that case in the union’s latest petition, and noted that in the five years since those tariffs were imposed, Chinese tire imports “have since shrunk dramatically, allowing the domestic industry to invest in new capacity in the United States.” That assertion about the fall of Chinese imports is true. According to MTD figures, in 2014 imports of Chinese-made PLT tires topped 60.5 million units. That number has dropped 94% to 3.4 million in 2019, according to MTD’s 2020 Facts Issue. But the tariffs on Chinese tires also prompted manufacturers and importers to move molds and production elsewhere — namely, to the countries now targeted by the new USW petition. “The result has been a renewed surge in imports,” the union noted, “this time from Korea, Taiwan, Thailand and Vietnam.” Among the figures the union points to is lessening market Ranking in 2019
Country
Imported PLT Tires
1.
Thailand
45.1 million
2.
South Korea
19.3 million
6.
Vietnam
11.9 million
8.
Taiwan
9.0 million
Total
85.3 million
The countries targeted by the USW’s tariff petition are among the top 10 biggest tire importers to the U.S. market.
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If past tire tariff investigations are a guide, it will be at least a year until the USW’s latest petition is settled.
share of domestic tiremakers in what has been a growing industry. Its data shows that in 2017, imports from the four countries accounted for 24.4% of the U.S. passenger and light truck tire market. By 2019, that share had increased to 27.9%. Comparatively, the domestic industry lost market share in that time span, from 41.2% in 2017 to 40.5% in 2019. The USW says it has a presence at five tire manufacturers’ U.S. factories: Cooper Tire & Rubber Co. (Findlay, Ohio, and Texarkana, Ark.); Goodyear Tire & Rubber Co. (Fayetteville, N.C., and Topeka, Kan.); Michelin North America Inc. (Tuscaloosa, Ala., and Fort Wayne, Ind.); Sumitomo Rubber North America (Tonawanda, N.Y.); and Yokohama Tire Corp. (Salem, Va.)
INDUSTRY REACTS
The Tire Industry Association (TIA) isn’t surprised that the USW has taken this action. Roy Littlefield Jr., CEO of TIA, said, “The United Steelworkers petition seeking higher import duties on passenger and light truck tires from Korea, Thailand, Taiwan and Vietnam reflects how tire manufacturing has grown and evolved in these countries in recent years, with the addition of numerous factories from Chinese tiremakers and others. “The union, in seeking anti-dumping and countervailing duties, is looking to preserve tire manufacturing jobs in the U.S., while tire retailers have found success selling products imported from these countries. “It’s not surprising, therefore, to see this action taken by the USW.” Most tiremakers contacted by Modern Tire Dealer declined to react to the USW petition. One exception was Peter Jung, senior vice president and chief operating officer at Hankook Tire America Corp. When asked what action Hankook might take in response to the union’s recent petition, Jung said, “It’s difficult to say at the moment, as it’s still early in the stage and nothing has been decided. We will reorganize our global production portfolio and increase U.S. plant production to meet our U.S. stakeholder demands.” ■ MTD June 2020
