Some companies are not optimistic about whether or not tyre protection cases can be “turned overâ€
One month after the Obama administration opened its first move to China's tires, the 106th Canton Fair held in October showed that after a fatal blow in the US market, it returned to the domestic market or went to markets outside the United States. The Chinese tire companies began to feel more severe competition pressure.
The US market is shrinking
On November 14th, the Chinese Permanent Delegation to the WTO formally filed a request for consultation within the framework of the WTO Dispute Mechanism in the special case of tire protection. It is understood that the request for consultation is the first step of the WTO dispute settlement process. The consultation period is generally 60 days. If the dispute cannot be resolved through consultations, the Chinese side has the right to take the second step, that is, to require the WTO to set up an expert group to investigate and decide on the US measures. "This means that there is still a possibility that the tires' special insurance policy may be overturned." The person in charge of the Triangle tires who participated in the Canton Fair pointed out yesterday.
However, despite this, there is still a thick dark cloud covering the head of Canton Fair's tire companies.
“The export to the U.S. market has basically shrunk. Adding a 35% punitive tariff is unaffordable for companies. Many tire companies that used to do business with Americans did not come here at the Canton Fair.†A responsible person in a tire company pointed out.
"Standing!" Talking about the U.S. market struck by the "special protection" stick, the country's largest tire exporter "triangle tire" throws two words. The person in charge of the company pointed out that in the past, the main customers of Delta tires in the US market have been sharply reduced from the original five or six, and there is only one old customer to date. "After the introduction of the special safeguard policy, US dealers have requested that all 35% of punitive tariffs be passed on to Chinese manufacturers. How can this be possible for the company?" The source said that the price is the fundamental reason why triangular tires have to fade out of the US market. In the past, the U.S. market accounted for about 30% of the export of triangular tires, which has now been reduced to 15%-12%."
The industry insiders lamented that the U.S. market under the shadow of special guarantees is like a chicken rib for many tire companies in China. “It's a shame to discard food.â€
Like "triangular tires," South China Tire, which has the highest export of high-performance tires in China, frankly stated that the current strategy in the US market is also "sticking to." "The whole September has not received an order. In October, although an order of 130,000 was received, due to delays in the other party's payment, this single business has not yet been implemented." Zou Yongzhi, general manager of Huanan Tire, told reporters According to the disclosure, he said that the special insurance big stick made Chinese tire companies feel pressure. So far, the stockpiles of tyres that have been stockpiled by a large number of American tire companies in the previous phase have not yet been cleared. Under such circumstances, the next step in the US tire market is still unclear. In this case, South China Tire can only do so. Best efforts to keep the American market, do not make money but also do it.
Increasing price pressure
46 million tires lost in the United States to the United States, China's tire companies will transfer to where?
Returning to the domestic market or fought in overseas markets outside the United States has become an intuitive target for tire exporters. However, after one month of market baptism, the Chinese tire companies that flocked to find their way out felt the increasing price pressure.
Qingdao Hengda Tire Co., Ltd. has been targeting markets outside the United States as the main target market. After the tire security protection plan broke out, "Honda tires" obviously felt the increasing price pressures. “For example, the demand for Chinese tires in a destination country is 100,000 in a year. In the past, we could have a market share of 20,000, but now we have a lot of pressure to achieve our share of the past, such as large triangles and exquisite ones. The brand has also begun to squeeze in.†Zhang, manager of Hengda tire sales analysis pointed out.
Not only small-sized tire companies began to feel pain, but big brand tires that were intensified by the directive also admitted that they felt competitive pressure. “Foreign customers are still trying to keep prices down!†said “triangle tiresâ€.
After the US market suffered a major setback, "South China Tire" is also facing the domestic market in the counterparty's price "Li Jian." Before the “special security case†took place, “South China Tire†had been supporting a domestic famous brand car. However, after the “special security case†occurred, it was almost overnight that many tire companies had the same goal. Business is not hesitate to open the way at low prices. Not only that, when it comes to a single business in Zhejiang, Zou Yongzhi said with emotion: “The company had finalized the cooperation program with the company the night before. Who knows, half way out of the way to bite the gold, there are still other A company emerged, made a low price, and snatched the order away!"
The future of going to the United States is not clear
Although the Chinese government submitted a request for consultation to the WTO on November 14th, for the evolution of the “special protection caseâ€, tire companies struggling for immediate livelihood at the Canton Fair did not show joy. "There may be the possibility of reversal of the case, but the most important thing is how to overcome the current difficulties." A number of enterprise representatives made similar statements.
Before the Chinese government submitted its consultations to the WTO, at the end of September, Hebei Xingmao Tire Co., Ltd. fired the first shot of counterattack. The U.S. International Trade Court requested the U.S. Department of Commerce to re-evaluate the case within 90 days and submit it to the court for review. The U.S. Department of Commerce stated that the U.S. Department of Commerce should “abandoned China’s product anti-subsidy tax or amend anti-dumping and countervailing measures against non-market economy countries. Survey policies and procedures." However, this gunshot that many media have described as "a turnaround" has not caused widespread resonance in tire companies.
“Tire special security policy implements 'different tax rate for different manufacturers', even if Hebei Xingmao wins the final case, it cannot be used as a reference for other tire companies, and another lawsuit is required!†The person in charge of “triangle tires†pointed out. According to calculations, one such lawsuit was taken and the company spent at least several months and spent more than 200,000 US dollars.
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