Tariff Investigation Shows ‘Prevasive Underselling at High Margins’

M-truck-tires-generic-FBSIZE-1The International Trade Commission (ITC) says there’s evidence of “significant” underselling of Chinese truck and bus tires from 2013 to 2015, and that the underselling margins generally increased over that time frame.

Yet, the ITC voted not to impose tariffs on those imported tires.

“We do not find that subject imports depressed U.S. producers’ prices to a significant degree.”

Here’s what Modern Tire Dealer is learning as we wade through the ITC’s final report following its decision not to place tariffs on truck and bus tires from China.

In the final phase of its investigation, five domestic tire producers and 27 importers provided usable pricing data on four tires for drive applications (excluding all-position) tires:

size 11R22.5, 16 ply rating, load range of H, speed rating L (75 mph)
size 11R24.5, 16 ply rating, load range of H, speed rating L (75 mph)
size 295/75R22.5, 14 ply rating, load range of G, speed rating L (75 mph)
size 285/75R24.5, 14 ply rating, load range of G, speed rating L (75 mph)
The commission says prices for domestic truck and bus tires declined between the first quarter of 2013 and the fourth quarter of 2015 for both original equipment and aftermarket sales on all four of the specified products.

“While subject import prices also generally declined, the record does not support a finding that subject imports caused price declines for domestically produced truck and bus tires.

“In particular, the record indicates changes in the cost of underlying raw materials affect the price of truck and bus tires. By any metric observed, raw material costs fell by considerably more than the price of domestically produced truck and bus tires during the period of investigation. Between January 2013 and December 2015, the price of rubber, the primary raw material used in the production of truck and bus tires, fell precipitously.”

In that same two-year time frame, the ITC says the per-unit cost of the industry’s raw materials fell from $144 per tire in 2013 to $109 per tire in 2015, a decline of $35 per tire or 24.3%.

To compare, the average unit value of commercial tire sales dropped from $324 per tire in 2013 to $292 in 2015, a decline of $32 per tire or 9.9%.

“Further, the ratio of the domestic industry’s underlying raw material costs to the value of the industry’s total net sales fell from 44.9% in 2013 to 42.3% in 2014, and fell further to 37.6% in 2015, indicating that the industry received increasing revenues on commercial sales relative to underlying raw material costs over the period of investiation. Due to the magnitude of the decline in raw material costs, we do not find that the subject imports depressed U.S. prices to a significant degree.”

The commission also didn’t find evidence that the imported tires prevented price increases on domestic prices.

The ITC says the “pervasive underselling” by the imported tires from China didn’t prevent the domestic industry from increasing shipments. The truck and bus tires from China also undersold imports from other countries, but the ITC says shipments of tires from those other countries “increased at approximately the same rate” as the tires from China.

Source MTD
Your Next Tire has all your tire needs whether you need tires for your minivan, backhoe, dump truck, lawn mower, atv, semi truck or Ford F150.

We have several warehouses full of tires and ship all over the USA daily. Give us a call at 1-888-513-8473 and check out our website http://www.yournexttire.com


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