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09/07/2018
New eu temporary import duties on chinese made truck tires

Dumping

 

Following a thorough investigation the EU Commission recognized dumping practices on truck tires of Chinese origin and has therefore introduced temporary import duties. The future of such measures are rather uncertain though, due to a number of appeals made by Chinese producers as well as fear of repercussions on exports.

Guido Gambassi

The EU Commission has recently approved to impose restrictive antidumping measures, albeit temporarily, on truck and bus radials (TBR) imported from the People’s Republic of China. Three were the most important stages of this nine-month long process: on 11th August 2017, in reply to specific requests by a coalition of European tire manufacturers and retreaders, the Commission’s Directorate General for Trade (DG Trade) launched an investigation aimed at confirming dumping practices by China on TBR imports, during which several European TBR producers and retreaders were consulted through questionnaires, collection of statistical data and on-site inspections in manufacturing plants. The second stage came on 2February 2018 as the Commission published in its official Gazette the “Commission Implementing Regulation (EU) 2018/163 dated 1 February 2018 making imports of new and retreaded tires for buses or lorries originating in the People's Republic of China subject to registration”. Basically, although the anti-dumping investigation had not yet reached its conclusion, the  Commission already had at its disposal sufficient evidence that imports of the product concerned from PRC are being dumped and the allegations made by the coalition that lodged the complaint to be well founded, therefore, as a precautionary measure, ordered the registration of imports for the purpose of subsequent retroactive application of import duties to start from 2 February, 2018.

The third stage came after the end of the investigations with the publication of  the “Commission Regulation (EU) 2018/683 of 4 May 2018 imposing a provisional anti-dumping duty on imports of certain pneumatic tires, new or retreaded, of rubber, of a kind used for buses or lorries, with a load index exceeding 121 originating in the People's Republic of China, and amending Implementing Regulation (EU) 2018/163”. The excise duty, which ranges from a minimum of 52.85 euro to a maximum of 82.17 euro, will be applicable for a period of six months. The European Commission therefore reported sufficient evidence of the existence of illegal dumping practices on imports of tires from China. As stated in the ruling, "there was a weighted average undercutting margin of between 21% and 31% due to imports of the product concerned from the country concerned into the Union market". 

Italian retreaders, who due to the invasion of low-cost tires in the replacement market suffered a 49% drop in sales over a ten-year period, applauded the introduction of the duties. Stefano Carloni, president of Airp, following the implementation of the restrictive measures, commented: "The publication of this regulation marks a turning point for us retreaders, especially as we have, for a considerable length of time, reported the damages caused by unfair competition of products sold well below their real cost. On the one hand, we finally see efforts to re-establish a level playing field in the market. On the other, it is also important to underline that the accurate investigation carried out by the Commission shows unequivocally the serious damage suffered by the European industry due to dumping practices that have lasted for far too long".

Nevertheless, the future appears to be quite fuzzy. The European Commission is in fact also  looking into addressing the appeals and protests received from a large numbers of Chinese tire manufacturers and importers. In addition, a parallel investigation, the end of which is expected by the end of July, is currently being carried out to ascertain the presence of public subsidies on the tires in question. In November, after the six months established by the provisional measures have expired, the Trade Defence Committee will meet again to assess, in the light of further appeals submitted by the companies concerned and any negotiations that might be in progress, whether to maintain, modify or remove the duties altogether, or whether to apply them retroactively to all tires imported in the Union since February 2 - and if they should be merged with other measures to compensate for any subsidies found. However, at this stage no outcome should be taken for granted.

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