The EU will impose definitive anti-dumping duties of up to 45.3% on Chinese car and light lorry tires from July 15, citing significant dumping margins and “material injury” to the EU’s tire industry. “Most injury indicators such as sales quantity, market share, employment, profitability and productivity showed a clear negative trend during the period considered,” the European Commission wrote. Imports of Chinese tires to the EU are overwhelmingly concentrated in the budget “tier 3” segment – the cheapest tires, which had become “economically non-viable” for European competitors as their import volume rose, the Commission said. Over 90% of Chinese tire imports into the EU fall into this budget segment, according to the Coalition Against Unfair Tire Imports. Much of the remaining share consists of higher-end tier 1 and 2 South Korean tires from Hankook Group, produced in Chinese factories.
Shandong Yongsheng Rubber Group, a budget producer, was hit with the highest duty of 45.3%, while 64 other producers received 24.4%. These included global brands’ Chinese plants of Italy’s Pirelli, America’s Goodyear, Germany’s Continental and Japan’s Sumitomo. Hankook received just 4.3%. The Commission said that China’s domestic prices were too distorted to serve as a benchmark and cited, among other things, the state’s influence on firms under the country’s “socialist market economy”, which it said allowed Beijing to interfere with prices and costs. The Commission noted that Beijing did not reply to questions it sent on state-induced distortions. The EU selected Turkey as its substitute source for “undistorted” prices, a move contested by Chinese producers and South Korea’s Kumho Tire and Hankook. The Korean groups argued that Turkey’s continued imports of Russian steel should have disqualified it, a claim which the Commission rejected.
The China Chamber of Commerce to the EU warned that the tariffs could create a further cost burden for the automotive sector. “The significant differences in duty rates among producers may have implications for the competitive position of companies operating in the same market, including European and Asian manufacturers with production facilities in China,” it said in a statement. The duties could help stabilize Europe’s tire sector, Citi analysts said in a note, calling the news “helpful for sentiment” and predicting that dealers could begin better supporting local players. “We would expect a positive share price reaction to be mostly felt at Goodyear, then Michelin, then Continental and finally Pirelli,” they wrote, as reported by the South China Morning Post.
