Following South Africa's tax on Chinese tires in 2023, the manufacturing base of Chinese tires in Southeast Asia is also targeted! A few days ago, the South Africa International Trade Administration Commission (ITAC) launched a new anti-circumvention investigation against suspected dumping and evasion of anti-dumping duties on Chinese tires.
The product under investigation is a new type of pneumatic rubber tire. The products allegedly "jumped from China to Thailand, Viet Nam and Cambodia for export to circumvent existing tariffs."
Southeast Asian tire manufacturing base, targeted
It is reported that the applicant for this anti-circumvention investigation is still the South Africa Tire Manufacturers Association (SATMC), which includes Bridgestone, Continental, Goodyear and Sumitomo Rubber subsidiaries in South Africa.
The products under investigation include passenger car tires (HS 4011.10.01, HS 4011.10.03, HS 4011.10.05, HS 4011.10.07, HS 4011.10.09) and truck and bus tires (HS 4011.20.16, HS 4011.20.18, HS 4011.20.26).
SATMC said Chinese exporters have shifted exports of related products from China to some of their related companies in Thailand, Viet Nam and Cambodia after imposing final anti-dumping duties on Chinese tires.
SATMC provided a list of Chinese exporters identified and alleged in the initial investigation to operate in Cambodia, Thailand and Viet Nam through operational or ownership ties.
SATMC argues that this linkage, together with the imposition of interim measures and eventual anti-dumping duties, directly leads to a change in trade patterns and weakens the remedial effect of anti-dumping measures.
In response, SATMC applied for tariffs of up to 68%, 84% and 21% on the products under investigation in Thailand, Viet Nam and Cambodia, respectively.
The dumping investigation period in this case is from November 1, 2023 to May 31, 2024. There are two investigation avoidance periods to determine whether there is a sales conversion, namely: March 1, 2022 to September 30, 2022, compared to October 1, 2022 to April 30, 2023; April 1, 2023 to October 31, 2023, compared to November 1, 2023 to May 31, 2024.
Tariffs on tires in South Africa have been strongly opposed
According to the rut, South Africa is the main exporter of Chinese tires in Africa. According to customs data, in July this year, China exported about 2,716.61 tons of passenger car tires from South Africa, worth about 6.9281 million US dollars.
In 2023, ITAC issued an announcement to make a final ruling on the anti-dumping case of motor vehicle passenger car tires and truck and bus tire products imported from China, and decided to impose taxes. The tax rate of the sampled enterprises is 0-43.6%; The tax rate for unsampled cooperative enterprises is 14.56%, and the tax rate for other enterprises is 41.47%.
However, the tariff has been strongly opposed by the South Africa Tyre Importers Association (TIASA). The TIASA representative said the tariffs were "ridiculous and misleading" and noted that the tariffs would lead to more imports of tires from Europe and Japan, which are of similar quality but at a higher price.
TIASA estimates that the cost of taxi tires in South Africa could rise by 41% after the tax on Chinese tires; The cost of tires for small passenger cars could rise by 38 to 40 percent; The cost of truck and bus tires has risen by an average of 17%.
Meanwhile, representatives of the South Africa Road Freight Association estimated that a 17 per cent increase in truck tire prices would have a knock-on effect of a 6 per cent increase in operator costs.
China's tires should be changed from going overseas 1.0 to going overseas 2.0
The 10 years from 2012 to 2021 of Chinese tires are defined as the era of going to sea 1.0. During this period, China Tire realized the change of overseas production capacity from scratch, and also undertook some orders from Europe and the United States that were lost due to trade sanctions through overseas production capacity.
Limited to geopolitics, labor costs, infrastructure, cultural environment and other factors, the location of enterprises in the 1.0 era of going overseas has been concentrated in Southeast Asia, which is close to China, has the same culture and has low costs, but this has also brought hidden dangers to the landing of the double reverse phase in 2021.
In the 2.0 era, the overseas destinations of enterprises are significantly differentiated and decentralized. From the perspective of continents, in addition to other parts of Asia, Europe, the Americas and Africa have become the destinations of tire companies, which has brought new challenges to overseas enterprises and will better avoid the risk of long-term capacity concentration.
At the same time, in the 2.0 era of going overseas since 2022, especially since the second half of 2023, the pace of mainland tire companies going overseas has accelerated, and the number of projects that have announced plans to build factories overseas has increased.
If the 1.0 era is the capacity transfer of China's leading enterprises, then in the 2.0 era, many unlisted companies are also forced to take the step of going overseas for business development or long-term involution.
More importantly, in the era of going overseas 2.0, the overseas competition of Chinese tire companies is no longer from 0 to 1 competition, but from 60 to 90 or even 100 points. Enterprises are more likely to compare which region is suitable for location, so that they can put into production faster, produce more stably, and better control production costs, and which company has better performance and more reliable brand in the perception of consumers in mature markets in Europe and the United States.
Only by taking the second road can the global market share of a single Chinese tire brand increase from the highest of about 2% in 2023 to 5% or even higher, which is the real long-term road to the growth of Chinese tires.