Affected by the special safeguard case, Sichuan tire companies stopped supplying to the United States

“We have ceased to supply the United States. We have now completed the new market expansion plan.” On the morning of September 9, Zhang Bin, Deputy Minister of Import and Export of Sichuan Tire & Rubber (Group) Co., Ltd. stated.

Affected by the "special protection case" of Chinese tires exported to the United States, Sichuan tire companies have decided to switch to the market. According to the statistics of Sichuan Rubber Group, from January to August this year, they transported tires worth more than 10 million U.S. dollars to the United States, accounting for half of the company’s total exports. However, due to the uncertainty of future U.S. policy, Sichuan Rubber Group had to suspend trading with customers. The relevant person in charge of the Provincial Department of Commerce’s Fairness Office said yesterday that the Sichuan Enterprise, which was affected by the special safeguard case, was only one member of the Sichuan Rubber Group.

Business will lose price advantage

China is a big country for tire production and export. The total amount of exports to the United States is about US$1.7 billion. Chinese tires are mainly used in the mid- to low-end market in the United States. The relevant person in charge of Giti Tire (China) Investment Co., Ltd. revealed that the reason why Chinese products are competitive is because of low prices. Tax increases will make China on the US market. The product will be substantially reduced and the industry will be severely hit. Production capacity may be reduced, affecting the employment of 100,000 workers.

The above person explained that “assuming a FOB of a tire is US$30, plus a 55% tariff, ocean freight, etc., the US dealer’s purchase price is more than US$50, which is more expensive than US-made tires. Tire prices may reach 60-70 US dollars, consumers will certainly refuse to buy. As a result, US dealers will stop ordering to China, leading to a sharp decline in China's tire production."

China Fortune Securities researcher Ding Dingkun said that more than 40 million U.S. exports account for a relatively large amount. If all of this part of the production is transferred back to the domestic market, it would mean that the market has increased the supply of nearly 8.4%. The figure is not small. Therefore, once the United States imposes high tariffs and the products cannot be exported, companies must reduce their production capacity. ”

It is noteworthy that after the United States, on May 18, India launched a special survey on passenger car tires in China. This is India's fifth special survey on China launched in 2009; Brazil, June 18th. The Foreign Trade Commission decided to impose a final anti-dumping duty on the radial tires of passenger and cargo vehicles imported from China. The validity period is five years. The pressure from the external market will inevitably accelerate the pace of the transition of the enterprise to the domestic market. Zhang Bin said that domestic sales pressure will soon appear.

Open up new markets to find opportunities

Zhang Bin said that the car tires and light-load truck tires involved in this case are the product categories that Chuankoo Group has exported to the United States. At present, Sichuan Rubber Group is watching the US market. “As soon as high tariffs are confirmed, companies will be rejected outside the US market.” Zhang Bin said that half of the products they export to the United States. In order to reduce risks, they are currently using existing channels to vigorously explore new markets in Europe, Australia, the Middle East, and Africa.

Sichuan Rubber Group has formulated market development for the next year

Plan: Integrate resources, open up the Middle East market through setting up an office, and enter Germany by participating in brand professional exhibitions such as the German Essen Tire Exhibition. At the same time, they are striving for REACH and other European trade certifications in order to increase the bargaining power for companies to enter the European market.

However, experts reminded that although the European market is also very large, but European countries have different requirements on tire product types and performance, unlike the US market, so if companies want to open up the European market, they need to spend some time to study market conditions and adjust production line.

â–¡News background

Chinese tires may be subject to high tariffs

On April 20 this year, the U.S. Iron and Steel Workers Federation applied to the US International Trade Commission for a "Special Safeguards" investigation procedure for Chinese-made tires, that is, to impose quota restrictions on China's imports of American tires from the annual import of 46 million to the annual limit. 25 million).

On June 29th, the US International Trade Commission recommended Obama again for the reason that Chinese tires disturbed the US market. On the basis of the current import tariff (3.4%-4%), it will continue to use Chinese tires and light truck tires for three consecutive years. Separate special tariffs of 55%, 45% and 35% are imposed. This is also the first investigation of special safeguards since Obama took office. On the 17th of this month, the Obama administration will formally make a decision on whether to impose high tariffs on Chinese-made tires that are exported to the United States and whether they will limit the number of imported Chinese tires.

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