If history is any guide, the entire tire market would see a price hike should the United States impose additional tariffs on Chinese imports, a U.S. tire importer told Xinhua in a recent interview.
American consumers would be put in harm's way, said Walter J. Weller, senior vice president of China Manufacturers Alliance.
Weller was one of the many corporate executives and industry leaders speaking at the hearings held by the U.S. International Trade Commission (USITC) on slapping an additional 25-percent tariff on 200 billion U.S. dollars' worth of Chinese goods. Most of them urged the commission to exclude the items necessary for their businesses from the list.
"The implementation of these tariffs, if they go as high as 25 percent, will be significant (for) the marketplace. After all, 40 percent of the U.S. replacement tire market is satisfied by imports from China," Weller told Xinhua.
Weller's company imports truck and bus radial (TBR) tires from China and Thailand and sells them to about 100 U.S. dealers, who represent over 1,000 points of sale as well as 20,000 employees.
If the tariffs were in place, Weller said there would be a shortage of radial truck tires in the United States, which would lead to a price hike for all tires, whether they have a tariff on them or not.
U.S. domestic manufacturers would take the opportunity to improve their profit margins even though those tariffs would not be directed at them, just as the price went up during the 2016-2017 anti-dumping probe against Chinese tires, he explained.
On Feb. 22, 2017, the USITC announced that China-made tires exported to the United States did not pose substantial damage or threat to the U.S. tire industry, overruling the decision of the U.S. Department of Commerce in 2016 that accused China of dumping tires.
According to Weller, the U.S. TBR tire manufacturing capacity is not enough to meet the domestic demand. The only market that has the capacity to satisfy this demand is China, which now provides for more than half of the world's TBR tire demands.
If an additional 25-percent tariff is levied on TBR tires from China, Weller said his company would import more from its Thailand plant to offset the effect. But the step takes time and is difficult for importers doing business exclusively with China.
Weller doesn't think the United States could find any other exporter to replace China. According to figures gathered by his company, China sold 7.2 million TBR tires to the United States in 2016, four times as many as the second largest exporter, Thailand, which is already at its full capacity.
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