The final hiked anti-dumping tariffs the EU will impose on imported Chinese truck and bus tires as well as retreaded tires have virtually bought the sale of these tires in Europe to a complete halt at least for the time being as they have become so expensive and unprofitable for buyers
Finally, after over a year, the European Union (EU) in Brussels has decided on the anti-dumping tariffs it will impose on truck and bus tires as well as retreaded tires that are manufactured in China and imported into Europe.
The Regulation 2018/1579 became effective towards the end of October after the EU had a lot of market speculation but also sprung a final unexpected turn in this long running situation by further increasing the tariff levels it had originally stated earlier this year virtually right across the board.
This final decision on tariffs shows that just Hankook Tire has their tariff reduced to euros 42.73 per tire whilst other tire manufacturers including Giti Tire, Aeolus Tire, Guizhou Tyres, Prinx Chengshin Shandong Tire, Qingdao Doublestar Tire, Sailun Jinyu Group, Shandong Hengfeng Rubber, Shandong Huasheng Rubber, Shandong Jinyu Tire, Shandong Linglong, Triangle Tyre and Zhongce Rubber Group are faced with even higher tariffs from euros 47.96 up to euros 49.31 per tire.
The EU has also decided to turn its attention towards the Chinese production facilities of leading international A brands such as Michelin (Michelin Shenyang Tire), Bridgestone (Bridgestone Huizhou Tire), Pirelli (Chemchina) and Goodyear (Goodyear Dalian Tire) now facing a tariff of up to euro 49.31 per tire. At the same time, Xingyuan Tire Group and Gaungrao Xinhongyuan Tyre have suffered the highest tariffs of euros 61.76 per tire.
The EU has also declined an appeal by Pirelli that they are not connected to National Tire & Rubber (owned by Chemchina) and therefore should not be listed as a union manufacturer because the company does not consider itself to be part of the Union industry.
This concluding EU statement has virtually bought the sale of Chinese imported truck and bus tires in Europe to an almost complete halt as the tariffs imposed on the tires have made them so expensive and therefore a completely unprofitable proposition for buyers.
There is no doubt that European tire wholesalers have been preparing themselves for the possibility of tariffs being imposed and looking to connect with appropriate manufacturers producing in Europe or at the very least, outside of China, with Thailand fast becoming one of a new ‘hotbed’ of tire production facilities. However, both in Europe and in some parts of Asia, tire production facilities have really struggled to cope with the additional demand for tires which has inevitably led to a shortage of truck and bus tires.
This tremendous slowdown in tire production has had a very negative effect on the commercial tire market in every European country and I have noticed that almost overnight, advertisements in European magazines (both hard copy and digital) for commercial tires have almost vanished. I have also spoken with the European distributors of several Chinese truck and bus tire manufacturers who admit that the ruling has effectively ‘ended’ most of their business in Europe…… At least for the time being!
Officially, all small commercial tires have now become totally unrealistic in price and larger tires are not far behind. One distributor (who shall remain nameless) points out that the affected Chinese producers are now frantically trying to divert production for Europe to their facilities outside of China which are mainly in Indonesia, Thailand and Vietnam. However, the big problem is cranking up production levels to meet the sudden instant demand which obviously takes time.
Another ‘interesting’ development has been the responsive action of the major A brands who have instantly switched their production to second-line brands that are produced outside of China and these tires are now being targeted by a lot of major European tire wholesalers as they try to locate the cheapest alternative at the moment.
It will take time to establish a true measure of the real impact the tariffs have made; but it is estimated that in the past few months Chinese imports have reduced by a massive 88% per month. Will the Chinese producers dodge around the tariffs by making their tyres in other countries and stage a comeback in the market? Watch this space!!!