Do Chinese tires still have export advantages？

In recent years, the global tire industry has seen significant shifts, with Chinese tires increasingly coming under scrutiny and facing various trade barriers. From anti-dumping duties to increased tariffs and regulatory hurdles, Chinese tires are encountering a complex landscape of international trade challenges. This article delves into the current state of the international tire market, exploring whether Chinese tires still hold export advantages amid growing resistance and evolving trade policies.

1. Rising Trade Barriers

South Africa’s Anti-Circumvention Investigation

On September 20, 2024, South Africa’s International Trade Administration Commission (ITAC) launched an anti-circumvention investigation targeting new inflatable radial tires exported from China through Cambodia, Thailand, and Vietnam. This move aims to address concerns that these countries are acting as intermediaries to circumvent anti-dumping duties imposed on Chinese tires. This investigation highlights the increasing vigilance of countries like South Africa in scrutinizing the origins of tire imports and enforcing trade regulations.

Brazil’s Increased Tariffs

Brazil recently approved a significant tariff hike for passenger car tires, raising the import duty from 16% to 25% as of September 18, 2024. The Brazilian tire manufacturing sector has advocated for a rise in import tariffs for commercial vehicle tires from 16% to 35%, citing the negative impact of low-priced foreign products on the domestic industry. With Brazilian tire prices reportedly 70% lower than the international average, this tariff adjustment reflects a broader trend of protecting local industries from international competition.

Global Resistance Against Chinese Tires

Chinese tires have faced global resistance due to their competitive pricing, which many perceive as unfairly undercutting local markets. Countries worldwide have implemented anti-dumping and countervailing duties against Chinese tires. For example:

• United Kingdom: On August 27, 2024, the UK Trade Remedies Authority (TRA) proposed higher tariffs on Chinese truck and bus tires to protect the domestic tire retreading industry from cheap imports. The TRA’s preliminary findings indicate that tariffs on some Chinese commercial tires could exceed 1,000 RMB per tire.

• United States: On August 8, 2024, the US International Trade Commission voted to continue imposing anti-dumping and countervailing duties on Chinese truck and bus tires. These duties, initially set between 21% and 63.3% for anti-subsidy and 9% to 22.6% for anti-dumping, will remain until the next review in 2029.

• India: On July 19, 2024, India’s Ministry of Finance decided to extend the countervailing duty on Chinese truck and bus tires for another five years, maintaining a rate of 17.57% on CIF values.

• Thailand’s Impact and US Tariffs

China’s strategy to mitigate trade barriers by establishing tire manufacturing bases in Thailand has faced backlash. With increased tire exports from Thailand to the US, the US has initiated annual reviews and live hearings on anti-dumping petitions related to Thai and Korean tires. The US Steel Workers Union’s petition, alleging a 47.8% dumping margin for Thai tires, underscores the intensifying scrutiny on regional production shifts.

2. The Emergence of Global Trade Policies

EU’s Anti-Subsidy Duties on Electric Vehicles

In addition to tire-specific measures, broader trade policies affect Chinese manufacturing. On July 4, 2024, the European Commission imposed provisional anti-subsidy duties on Chinese electric vehicles (EVs), with varying rates for different manufacturers. This move reflects the EU’s growing concern over competitive pricing from Chinese producers and signals potential future challenges for other Chinese exports.

China’s Response and Strategic Adjustments

China’s tire industry, once dominant due to low pricing, faces increased resistance globally. To counteract these barriers, Chinese tire manufacturers are focusing on improving quality, investing in high-end technology, and enhancing brand reputation. Companies are also diversifying their manufacturing locations to mitigate the impact of tariffs and trade restrictions.

Domestic vs. International Market Dynamics

The rapid rise of Chinese tire brands such as Triangle, Linglong, and Double Coin illustrates the sector’s shift from low-cost to high-quality products. Despite the resistance, these brands are making strides in the high-end market, competing effectively against established international brands. The emphasis is shifting towards innovation, quality, and brand strength, challenging the perception of Chinese tires as merely low-cost options.