court battle in south africa over chinese tyre imports

The Tyre Importers Association of South Africa (TIASA) has applied to court to get the International Trade Administration Commission (ITAC) and SA Tyre Manufacturers Conference (SATMC) to disclose critical information with regard to the SATMC’s anti-dumping application to the ITAC.

The SATMC in January requested the ITAC to investigate the practice of Chinese tyres being imported into South Africa at uncompetitively low rates, thereby causing material damage to the domestic manufacturing industry.

“We are operating in the dark when it comes to this application for additional duties, and the stakes are high for South Africa,” said Charl de Villiers, TIASA Chairperson.

“If ITAC decides to impose the maximum duty percentage requested by SATMC, we could see price increases range from 41% for taxi tyres, 38-40% for passenger tyres, and an average of 17% for truck and bus tyres.”

De Villiers warns that this increase in tyre prices could spill over into other areas of the economy and noticeably increase prices for various goods and services.

TIASA court application

TIASA argues that the four large manufacturers Bridgestone, Continental, Goodyear, and Sumitomo who are collectively represented by the SATMC are unable to produce their full range of products in the country, and that “they themselves import 80% of the variety that they sell to meet local demand,” said De Villiers.

However, he said the SATMC “refuses to disclose what they import, from where, and for what reason,” he said.

This is critical information for determining the outcome of the anti-dumping application, as it’s necessary to prove that if any material damage was inflicted on the local industry it must have been caused by the dumping of imported tyres and not something else, according to Donald MacKay, CEO of XA Global Trade Advisors.

“If SATMC members are importing a significant volume of tyres themselves, they would be inflicting their own injury, which would need to be offset for any injury they claim. They would therefore need to demonstrate a compelling reason for the imports,” said MacKay.

“This is not confidential information, and it is material to their import duty application and their rationale.”

In addition, TIASA said the ITAC received responses to the investigation from over 60 companies but decided to only review a small sample of the submissions, and that there was no consultation with the industry with respect to the sampling.

“With a complex product like tyres, where the local market sells over 3,000 different models, it is almost impossible to select a truly representative sample,” said Mackay.

The small sample could therefore cause the duty decision to be based on skewed results.

If additional import duties on Chinese tyres are in fact imposed, TIASA warns cash-strapped motorists may make dangerous decisions such as trading down to pre-owned, illegally regrooved, or illicit tyres, or delay replacing their tyres, which puts their safety on the roads at a higher risk.

“TIASA is asking the court to direct ITAC to remedy its sampling, provide TIASA with SATMC’s import data, and the reasons for their imports; and to allow TIASA sufficient time to make a submission to ITAC before it takes any decision on the imposition of duties,” said the organisation.

The ITAC investigation was initiated on 31 January 2022 and a final determination on the outcome of the case is currently expected for early 2023.

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