· US "counter-subsidy" shocks China's auto tire industry

On November 24, 2014, the US Department of Commerce announced the preliminary results of countervailing on China's export tires. It initially determined that China's passenger car tires and light truck tires exported to the United States received excessive government subsidies, with a subsidy of 12.5%. To 81.29%. The United States requires developing countries to subsidize no more than 2%, and developed countries should not exceed 1%.

Based on this preliminary ruling, the US Department of Commerce will notify the US Customs and Border Protection to levy a corresponding deposit on China's export products.

According to China Customs statistics, in 2013, the amount of Chinese tires exported to the United States was $3.34 billion. Based on this, the relevant agencies inferred that the United States intends to impose a countervailing duty on China's export passenger car tires and light truck tires, involving more than $3 billion.

This preliminary result has caused a lot of shocks in the Chinese auto tire industry.

Yongsheng withdraws from the lawsuit

At the request of the United Steelworkers Union and another labor organization, the US Department of Commerce announced on July 15, 2014 that it officially filed a “double-reverse” (anti-dumping and countervailing) on ​​passenger car tires and light truck tires imported from China. The investigation initially determined that the dumping margin of related products was 45.8% to 87.99%, and the subsidy rate was higher than 2%. It is possible to impose a penalty tariff on passenger car tires and light truck tires exported from China to the United States.

The US “double-reverse” investigation of Chinese passenger car tires and light truck tires was conducted in the case of serious applicant qualifications, the failure of US tire companies to file a case, relevant US industrial organizations and China’s strong opposition.

On July 22, 2014 local time in the United States, six members of the US International Trade Commission voted in a full vote to determine that passenger car tires and light truck tires imported from China received improper government subsidies, dumped in the United States, and caused substantial damage to the US tire industry. damage. This means that the US Department of Commerce continues to conduct a "double-reverse" investigation into China's export tires.

On August 14, the US Department of Commerce selected Shandong Yongsheng Rubber Group Co., Ltd. and Fujian Jiatong Tire Co., Ltd. as the counter-subsidy mandatory responding enterprises.

On August 27th, the US Department of Commerce selected Shandong Yongsheng Rubber Group Co., Ltd. and Jiatong Tire Global Trading Co., Ltd. and its affiliates Jiatong Tire (USA) Co., Ltd., Jiatong Tire (Anhui) Co., Ltd., Jiatong Tire ( Fujian) Co., Ltd. and Jiatong Tire (Hua Lin) Co., Ltd. are mandatory responding companies for anti-dumping.

According to US Customs statistics, in 2013, the two companies ranked the top two in terms of US tire exports.

Shandong Yongsheng Rubber Group Co., Ltd. officially withdrew from the "double opposition" mandatory appeals on October 7, 2014.

On October 8, the United States announced the addition of two Chinese tire companies as mandatory responding companies. Among them, Qingdao Sailong Co., Ltd. was selected as an anti-dumping mandatory responding enterprise, and another company was selected as a counter-subsidy mandatory responding enterprise.

Because the so-called non-subsidy investigation of the US Department of Commerce did not take the initiative to abandon the right to counter-subsidy, the Shandong Yongsheng Rubber Group Co., Ltd. obtained a punitive tariff of 81.29% in the anti-subsidy preliminary ruling of the US Department of Commerce.

“The initial ruling result is unlikely to change”

The US Department of Commerce issued a tire countervailing case questionnaire at the same time as the anti-subsidy mandatory responding enterprise was announced.

In the countervailing investigation process, in addition to the special questionnaires such as the US Department of Commerce issuing a surprise export questionnaire, the countervailing non-mandatory responding companies do not need to provide any answers.

The US Department of Commerce said: "Except for mandatory responding companies, no other companies will accept voluntary applications."

Countervailing response is a particularly troublesome thing. On November 2, 2014, Yang Hong, Minister of Exports of Qingdao Sen Qilin Tire Co., Ltd. said in an interview: “There are thousands of pages of relevant data provided.” In addition to hiring lawyers, responding companies must invest a large amount. Human, material and financial resources.

The U.S. Department of Commerce’s preliminary ruling on China’s export tire countervailing: the countervailing duty rates of Jiatong Tire (Fujian) Co., Ltd. and another mandatory responding enterprise were 17.69% and 12.5% ​​respectively; other Chinese tire companies were weighted by the two companies. The average tax rate is 15.69%.

Yang Hong believes that: “The possibility of non-mandatory responding companies being accepted for prosecution is very small. The possibility of changing the anti-subsidy preliminary ruling of the US Department of Commerce is also very small.”

On November 3, 2014, Zhang Hongmin, secretary general of Shandong Rubber Industry Association, said in an interview: "Because there are precedents such as the US tire special protection case, it is unlikely that the US Department of Commerce's countervailing preliminary ruling results will be cancelled or adjusted. There are tire companies looking for ways to deal with them. We are also actively reporting the tire company's demands to the relevant government departments, and suggest that the relevant departments of the Chinese government take reciprocal countermeasures and cannot always be passive in this regard."

"Buffing also pays taxes"

On November 3, 2014, an official from the International Trade Department of Shandong Yongsheng Rubber Group Co., Ltd. said in an interview: "In recent years, our company has exported more than 6 million passenger car tires to the US every year. Our tire export has a great impact. The US tire export business can't be done. Our company boss has decided to suspend shipments to the US (shipping tires). We are actively striving to develop more markets. There are also some things that customs need Handling. Recently, we are particularly busy."

In recent years, Qingdao Sen Qilin Tire Co., Ltd. has exported one-fifth of its total tire exports to the United States. Yang Hong said: "According to the results of the anti-subsidy preliminary ruling of the US Department of Commerce, our company and other non-mandatory responding companies have obtained an average tax rate of 15.69% for the export of tires to the United States. The price of the US auto tire market is unlikely to rise so fast. Suppliers have been pricing tires for export tires very low, with low margins and minimal price increases. US tire importers will not give higher prices. Tire manufacturers are hard to maintain at a loss.

Are Chinese state departments and local governments over-subsidizing passenger car tires and light truck tires exported to the United States as accused by the United States? This is an extremely critical issue.

Yang Hong pointed out: "The governments of all countries have policies and measures to encourage enterprises to earn foreign exchange through exports. The key is to control within a reasonable range. Different countries in China enjoy different levels of government subsidies in terms of raw material supply, financial services, and new product development. However, they are within reasonable limits and not as serious as the United States has accused. The US 'double anti-' is essentially a trade protection act. The United States promotes trade protectionism and tries to protect its domestic tire industry and increase its employment rate, which is often counterproductive. ."

Zhang Hongmin replied: "The government has a little subsidy for tire companies, but not so much. The Chinese authorities and some local government leaders often work in some conference work reports and some media, boasting what subsidies are given to tire companies and helping tire companies. Some difficulties were solved; in fact, it was exaggerated, bragging, and a lot of water. The US government seized the 'handle' and made Chinese tire companies suffer. Originally, they did not know that they should pay taxes.

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