Brazilian Policy Change to Benefit Chinese Tire Industry

Brazil plans to grant China market economy status (MES), a foreign media outlet quoted a senior Brazilian official who had direct information on the matter as saying.

The official, asking for anonymity on grounds of unpublished information, said that denying the MES to China may expose Brazil to the risks of disputes with its major trading partner.

Fast-paced Growth in China, Brazil Tire Trade

According to the Agreement on China’s Accession to the World Trade Organization(WTO) signed in 2001, other countries should grant China with MES treatment in 15 years, namely by December 2016.

The aforementioned official said granting China the MES will lead to an end to antidumping duties imposed on Chinese commodities.

It is learned that the Brazilian government is mulling over the impact of the decision on the domestic industry and considering other possible measures to help its manufacturing industry.

Brazil’s recognition of China’s MES status is undoubtedly a boon for the Chinese tire industry, said some industry insider.

As the farthest country from China in the BRICKS, Brazil enjoys increasingly closer ties with the Middle Kingdom. Brazil is China’s largest trading partner in Latin America, whilst China is Brazil’s largest trading partner in the world.

The tire trade volume between the two countries have increased year by year. More and more Chinese tires are sold to the Brazil market.

However, the National Confederation of Industries (CNI) of Brazil once indicated that the government should take measures similar to European Union and the United States to guard against the flush of Chinese products into its market.

Frequent Antidumping Measures Against Chinese Tires

As trade between the two countries grow, Brazil has also become one of the countries that frequently take antidumping measures against Chinese products.

Almost all Chinese tire products encountered antidumping investigations from Brazil.

At the end of 2015, Brazil launched antidumping probes into Chinese agriculture tires and expanded the scope of investigations to 45 Chinese tire companies.

Of them, Guizhou Tire Co.,Ltd., Qingdao Qihang Tire Co., Ltd., Qingdao Aonuo Group and Hangzhou Zhongce Rubber Co., Ltd. were taken as sample companies.

Before this, Brazil had extended the period of antidumping investigations into Chinese truck tires to 2020 and announced 1.12 to 2.59 USD/kg antidumping duties on Chinese tire trucks.

Earlier, Brazil had imposed antidumping duties on Chinese passenger car tires at a rate of 2.41 USD/kg or 69.5 percent.

In 2014, Brazil decided to levy a 5-year antidumping duty on bicycles imported from China at 0.28-3.85 USD/kg.

Other products related to tires also felt the impact.

In 2014, Brazil started to levy antidumping duties on white carbon black imported from China. The duties, ranging from 63.39 USD/tonne, 256.09 USD/tonne to 594.41 USD/tonne,are effective until April 24, 2019.