Anti-dumping duties on imported Chinese tyres have been imposed on the South African tyre industry for the next five years. Following an investigation by the International Trade Administration Commission (Itac), Ebrahim Patel, Minister of Trade, Industry, and Competition, announced that new pneumatic tyres for cars, buses, and lorries imported from China will face anti-dumping duties ranging from 7.18% to 43.6%.
The South African Tyres Manufacturers Conference (SATMC), which represents companies such as Bridgestone, Continental, Goodyear, and Sumitomo, filed the anti-dumping measure application. These companies are in charge of tyre production in the Southern African Customs Union (Sacu). The dumping of Chinese tyres, according to SATMC, causes material harm in terms of price undercutting, declining sales volumes, market share, employment, output, and productivity.
Itac introduced provisional duties of 38.33% based on prima facie evidence of dumping after the application was submitted on November 24, 2021. These temporary duties were in e ffect until March 8 of this year. However, Itac discovered some flaws in the initial application, and the full investigation began at the end of January after SATMC updated its information.
The Tyre Importers Association of South Africa (Tiasa) objected to the imposition of provisional duties and the investigation, claiming that it would lead to an increase in tyre prices for passenger vehicles, buses, and lorries. Tiasa also claimed that these duties would have a negative impact on taxi commuters, who were already burdened by rapidly rising living costs. They emphasised that import duties of 25% to 30% had already been imposed on imported tyres, and that additional duties could raise prices by 17% to 40%.
The additional duty will inevitably be passed on to the end consumer, according to Tonderai Chibasa, tariff and trade remedies manager at XA Global Trade Advisors, because the local industry relies on imports for certain types of tyres. Furthermore, Chibasa speculates that imports may shift to non-affected countries such as the European Union or Thailand, where some Chinese manufacturers also have plants.
According to Itac’s investigation, from 1 August 2020 to 31 July 2021, dumped Chinese tyres with various rim sizes for cars, buses, and lorries accounted for between 36% and 81% of total imports. SATMC sought anti-dumping duties ranging from 7% to 69%, but the final duty imposed is 43.6%. In South Africa, a product is considered “dumped” if its landed cost is less than the price it is sold for in China.
SATMC was pleased with the final decision to impose anti-dumping duties, which will be in effect until July 2028. They welcome the opportunity to keep the domestic tyre manufacturing sector competitive, ensuring a level playing field and preserving local job opportunities.
Finally, with the imposition of anti-dumping duties for the next five years, the South African tyre industry has gained protection against Chinese tyre dumping. While this move is intended to help local manufacturers and protect the industry, there are concerns about potential price increases for consumers and import shifts to other countries. The implementation of these duties will be critical in ensuring that the South African tyre industry remains sustainable and competitive.
Article source: Business tech Africa
