2 companies exempt from retroactive tariffs

Importers who purchased tires from Giti Tire Group or Cooper Kunshan are exempt from the 90-day retroactive tariffs imposed by the United States Department of Commerce (DOC) on consumer tire imports from China.

The DOC “individually examined” Giti, Cooper Kunshan and Shandong Yongsheng Rubber Group Co. Ltd. during its investigation into claims that the Chinese government has been providing subsidies for the export of tires.

In its Dec. 1, 2014, Federal Register notice, the DOC does not give a reason for exempting two of the three individually examined companies from the retroactive assessment:

“Moreover, because we preliminarily find critical circumstances exist with respect to Yongsheng, and all other exporters or producers not individually examined, in accordance with section 703(e)(2)(A) of the Act, we are directing CBP to apply the suspension of liquidation to any unliquidated entries entered, or withdrawn from warehouse for consumption by these companies, on or after the date which is 90 days prior to the date of publication of this notice in the Federal Register.

Will Chinese tire makers challenge the tariffs?

By Dec. 6, all Chinese tire manufacturers will know how DOC calculated the additional tariff importers must pay for their products. The DOC has given the Chinese companies the option to challenge the tariffs. The question is, will they?

The tariffs became effective on Dec. 1, the day the results of the DOC’s investigation appeared the Federal Register.

The DOC concluded Chinese tire companies have been subsidized by their government and imposed tariffs ranging from 12.5 % to 81.29%, depending on the tire brand. As the tariffs are retroactive 90 days from the Dec. 1, tires which entered the country since Sept. 2 are subject to the additional taxes.

In the Dec. 1 Federal Register notice, the DOC says it “intends to disclose to interested parties the calculations performed in connection with this preliminary determination within five days of its public announcement.” The DOC also says the interested parties may “submit case and rebuttal briefs, as well as request a hearing.”

Will any tire companies attempt to refute the DOC’s findings? At least one seems to be planning a rebuttal, judging from a statement issued by Giti Tire (USA) Ltd., the marketing arms of Giti Tire Group.

"Giti believes that these preliminary duties do not reflect its actual circumstance. The company is seeking clarification from the department on its calculation and will continue to work with the department between now and the issuance of the final determination to ensure that Giti Tire’s actual circumstance is properly reflected in the department’s calculation.”

The tariffs imposed by the DOC (which are in addition to the existing 4% tariffs on consumer tires imported from China) are:

Cooper Tire & Rubber Co.: 12.5%.

GITI Tire (Fujian) Co. Ltd. (and certain cross-owned companies): 17.69%.

Shandong Yongsheng Rubber Group Co. Ltd.: 81.19%.

All other Chinese exporters: 15.69%.