China’s Ministry of Commerce (MOC) has reportedly said that the European Commission (EC)’s decision to impose duties on China-made bus and lorry tyres is a measure to artificially raise the dumping margins by using the cost of production in a third country to calculate the value of Chinese products, which is typically known as the ‘surrogate country approach’.
MOC’s spokesperson Gao Feng said, “We urge the European side to fully implement its obligations under Article 15 of the Protocol on China’s Accession to the World Trade Organisation (WTO) and treat Chinese companies fairly during anti-dumping investigations.”
Article 15 requires all WTO members not to use the surrogate country approach during anti-dumping investigations into Chinese companies and was effected in December 2016.
The EC has said that it will impose temporary anti-dumping duties of up to 166% on Chinese bus and lorry tyres for six months as of 8 May.
According to the European Union (Volume 61), as per Commission Regulation (EU) 2018/683 of 4 May 2018, provisional anti-dumping duties of between EUR52.85 and EUR82.17 per tyre will be levied on new and retreaded tyres for buses or lorries with a load index exceeding 121, currently falling within CN codes 4011 20 90 and ex 4012 12 00 (TARIC code 4012120010) and originating in China. The Regulation enters force the day after the Official Journal’s publication and shall apply in all member states for a period of six months.
The lowest rate of duties is EUR52.85, and this rate applies specifically to tyres coming from two Hankook Tire factories in China. Truck and bus tyres produced by Giti Tire in China will be charged duties of EUR57.42 per tyre, while tyres made by “cooperating Chinese exporting producers” – including plants operated by Bridgestone, Goodyear, Michelin, Toyo and Triangle Tyre – will be levied at a rate of EUR62.79 per tyre. Pirelli products and other tyre brands made by ChemChina companies will attract duties of EUR64.13 per tyre, while the highest levy of EUR82.17 euros will be applied to products from Xingyuan Tire Group and “all other companies.”
The EC will decide whether to extend the measure for a further five years based on the results of the ongoing investigation.
The EC initiated its investigation in August 2017 in response to a complaint by EU tyre manufacturers. It is estimated that China’s share of tyre imports into the EU increased from 17% to 21% between January 2014 and June 2017.