China may face more U.S. Dumping charges on tires, Okachi says

06/11/2011 12:00 - 465 Views

China may face more anti-dumping charges from the U.S. over tire exports, possibly cutting natural rubber demand in the world’s largest user and lowering prices of the commodity, an executive at Okachi & Co. said.

The U.S. is likely to impose duties on products including all-steel radial tires used on heavy trucks after the World Trade Organization in September rejected China’s appeal of a ruling that backed U.S. duties on tire imports, said Lizhi Tang, president of Okachi’s greater China region. In that ruling, the WTO had said the U.S. hadn’t violated global trade rules in imposing the three-year levies on certain passenger vehicle tires and light-truck tires.

“Technically, after the September ruling, it’ll be easier for the U.S. to convince the WTO to seek a similar ruling against high-end Chinese tires,” Tang said. The dispute is set to intensify, which may further reduce China’s rubber demand as about half of its tire output is for export, Tang said. Okachi has the largest open interest in natural rubber futures on the Tokyo Commodity Exchange, according to Tang.

Prices tumbled 20 percent in the past three months on concern the Europe debt crisis may derail the global recovery. April-delivery rubber lost as much as 3.4 percent to 287.8 yen a kilogram ($3,680 a metric ton), the lowest level since Oct. 26, before settling at 293 yen on the Tokyo Commodity Exchange. The price fell for a third day.

WTO judges found last December that the tariffs on $1.8 billion of car and light-truck tires from China were legal. President Barack Obama imposed the duties of as much as 35 percent in September 2009 under a so-called safeguard provision designed to protect U.S. producers from a surge in imports.

‘Disastrous Impact’

About 80 percent of China’s tire exports to the U.S. are all-steel radials, said Zhao Cheng, an analyst at Zhongcai Futures Co. “You can imagine what a disastrous impact it will have on Chinese tire makers if China finds the U.S. market has shut its door.”

The Chinese government said the tariffs broke WTO rules and were a “serious case of trade protectionism.” China lodged its complaint at the Geneva-based WTO against the levies just three days after Obama announced them.

Chinese tire exports fell almost 24 percent last year from 2009 and 6 percent in the first half of 2011 while overall U.S. tire imports increased 20 percent last year and 9 percent in the first half, according to the statement.

11/2/2011 7:08 AM

Source: 11/2/2011 7:08 AM