Experience anti-dumping tide Tire industry accelerated structural adjustment

In recent months, a new wave of anti-dumping measures has emerged against Chinese tire exports, with countries such as the United States, India, and Peru leading the charge. At the same time, domestic tire companies are grappling with a reduced export tax rebate rate, adding to their already complex challenges in the global market. This surge in anti-dumping actions has been particularly intense. In June this year, Titan Tire Company and the U.S. Steel Workers Union (USW) filed a petition with the U.S. Department of Commerce and the International Trade Commission, requesting an investigation into non-road tires from China—used in construction and agricultural machinery—alleging dumping and subsidy practices. The complaint claimed that Chinese products have captured a significant share of the U.S. market and continue to grow, causing substantial harm to local industries. The U.S. investigation covered the period from October 1, 2006, to March 31, 2007, with an alleged dumping margin of 87%. In 2006 alone, China exported over 14.95 million tire units to the U.S., valued at more than $370 million. All companies involved in these exports during the investigation period were targeted by the U.S. authorities. Interestingly, the U.S. complainant chose India as an alternative country for calculating dumping margins. However, China’s tire exports also faced anti-dumping measures in India. Recently, India's Ministry of Commerce and Industry finalized an anti-dumping investigation on car and truck tires from China and Thailand. They set a minimum import price for Chinese products, including inner tubes, tire linings, and rubber tires, with specific thresholds. If a company sells below these prices, it would be subject to anti-dumping duties. This is not the first time Chinese tire exports have faced such scrutiny. Since 2001, multiple countries—including Australia, Brazil, Peru, Egypt, Argentina, Turkey, South Africa, Mexico, and the U.S.—have launched anti-dumping investigations on Chinese tire products. Many of these nations have imposed punitive tariffs, further complicating the export landscape for Chinese manufacturers. Compounding these issues, China’s export tax rebate rate for tires was reduced from 13% to 5% starting July 1, placing additional pressure on export costs. Companies like Qingdao Double Star, Nguyen Tire, and Aeolus have already reported significant profit declines due to this policy change, with some experiencing losses exceeding RMB 10 million. However, industry insiders suggest that while the tax rebate reduction appears to be a major challenge, its impact is temporary and limited for most listed companies. More importantly, it could drive much-needed structural adjustments within the industry, helping to ease international trade tensions and reduce the risk of anti-dumping investigations. According to Zhao Yingjie, a consultant with Beijing Zhongyuan Information Technology Consulting, one of the main reasons for frequent anti-dumping cases against Chinese tires is the low-price competition strategy adopted by some exporters. While China’s tire industry has grown rapidly, producing over 430 million units in 2006—second only to the U.S.—it faces structural imbalances, including a large number of small-scale manufacturers with limited technological capabilities. Currently, the average production capacity of Chinese tire companies is just 400,000 units per year, compared to the U.S. average of 4.4 million units. Only a few large firms produce over a million units annually, highlighting the industry’s fragmented nature. Many small producers in regions like Shandong operate with outdated equipment and poor quality control, often engaging in price wars to capture markets in developing countries. Some even sell at a loss, relying heavily on export tax rebates to stay profitable, which damages the reputation of Chinese tire exports globally. Liu Jin, an analyst at Haitong Securities, notes that the tax rebate cut will push up export prices. Large manufacturers, who mainly export high-end products, can absorb these increases more easily. However, small manufacturers producing low-end tires may struggle, leading to increased consolidation within the industry. This shift could reduce trade frictions and benefit larger players like Aeolus. Moreover, the tax rebate reduction encourages companies to invest more in research and development of high-value products such as giant engineering radial tires and eco-friendly tires. This move could help Chinese firms challenge multinational giants in technology and innovation, positioning them more competitively in the global market.

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