Despite the U.S. Department of Commerce last year finding that low-price Chinese truck tires being dumped on the U.S. market should be subject to tariffs, the International Trade Commission voted earlier this year against imposing tariffs. One retread company is leading the charge to petition the White House to address the issue.
After networking with other companies in the retread industry ahead of the North American Tire & Retread Expo in New Orleans last month, Marangoni Tread North America researched the issue and created an online petition. If it gets 100,000 signatures by June 25, according to the company, the White House will review it and provide a response.
The petition asks President Trump to fill the vacant seat on the six-member International Trade Commission. One of the commission’s members, Dean Pinkert, recused himself from the truck tire investigation last year, and has since vacated his seat on the board. Marangoni, which says it created the petition “on behalf of all of us that are in retreading and related industries” believes Pinkert’s absence “undoubtedly impacted the final determination.” The resulting vote was 3-2 against tariffs. If Pinkert had voted as he had previously, for tariffs, the result would have been a tie and that would have meant the tariffs would have been imposed, according to Marangoni.
The vote came as a major surprise to the industry following a Commerce Department investigation that determined there was a problem. In its preliminary determination last June, the Commerce Department said it found that commercial truck and bus tires imported from China are benefitting from subsidies from the Chinese government.
“The whole industry was led to believe… that the ITC ruling was going to be in favor of imposing tariffs and duties. And when it didn’t, it was quite a surprise,” Bill Sweatman, president and CEO of Marangoni Tread North America, told HDT in an interview.
The Marangoni petition says more than 60,000 U.S. jobs in the retreading and related industries are threatened as a result of the February 22 ITC ruling and also notes the environmental benefits of retreading.
As Sweatman said, “retreading has an economic as well as an environmental positive impact. The real cheap, three-belt, non-retreadable Chinese truck tires are impacting both the economy as well as the environment.”
The problem is that some fleets will buy the low-price Chinese tires, which generally do not have high-quality casings that are retreadable, rather than buying high-quality tires and retreading them.
“If you don’t have a good retreadable casing, then those tires become one-time-use tires that have to be disposed of,” Sweatman explained. “Economically and environmentally that is the wrong thing to do.”
"We ask trucking fleets to compare the cost after running the [cheap Chinese] product,” he added. Many of them have returned to premium new tires that are retreadable. We think in the long term that the market is going to reject these tires from China that are less quality.”
He noted that Marangoni and the rest of the retreading industry are not asking or expecting the government to give the retreading industry favorable treatment, but simply are seeking “fair, free trade."
“We’re all about fair trade, but those tires are coming in here at less than fair value.”
“The president could not overturn the decision,” explained Ron Elliott, marketing and communications manager for the retread company, “but the appeal is to go back and have it before the commission with all six members instead of the original five. We want to create enough buzz that it will get to the White House to alert the president that this is a huge problem. It not only directly affects 60,000 jobs, but there’s also a trickle effect of upwards of 200,000.”
HDT sister publication Modern Tire Dealer dug through the ITC’s report and reported that the commission’s findings indicated that even though there was evidence of “significant” underselling of Chinese truck and bus tires from 2013 to 2015, during the same time period, dropping raw material costs were a major factor in the price of tires. “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.”