The State reports, “New tariffs placed by the US Department of Commerce on tyres manufactured in China – including those made by Giti Tire – have raised concerns in South Carolina. Gov. Nikki Haley wants commerce department officials to reconsider the 17.69 percent tariff targeted for Giti, which plans to build a plant in Chester County. Haley, in a Tuesday letter, said the tariff “inequitably affects Giti’s business.” Chester County’s economic development director, Karlisa Parker, said officials there have discussed the pending tariff. But, she said, the company has indicated the tariff would not threaten plans to build a $560 million plant off S.C. 9 near I-77. The plant is expected to employ 1,700 workers.
The US Department of Commerce imposed the tariffs to offset subsidies the Chinese government gives to tyre manufacturers in that country. The United Steelworkers union and others believe the Chinese subsidies lower the prices of Chinese-made tyres sold in the United States, which threatens the jobs of US tyre workers. Giti’s tariffs are 2 percentage points higher than all but two other Chinese tyre manufacturers.
The tariff is in addition to an existing 4 percent duty. The tariffs were imposed on Dec. 1, but a decision on the final rates is expected in April. While Giti’s headquarters are in Singapore, the company has seven plants in China. In her Tuesday letter, Haley asked the commerce department to revise Giti’s rate quickly. The letter doesn’t specify what the rate should be. “I urge Commerce to quickly resolve this issue before it inequitably affects Giti’s business as they build their new facility in our state.” A final tariff decision is scheduled to be made by April 16.
Chaney Adams, Haley’s press secretary, said Thursday, “Governor Haley has always said we have to take care of our businesses and workers, Giti is a company that will take care of a lot of our families, and so when she became aware of the tariff situation, it was important to her to contact the Obama administration directly.” Chinese tyre exports to the US have more than doubled in recent years, according to the commerce department.
Domestic production during the same period has fallen 11 percent. The United Steelworkers union petitioned the US Department of Commerce for the tariffs, claiming cheap Chinese tyres are costing US workers jobs. The steelworkers union estimated US producers would lose another 10 million tyres because of Chinese imports in 2014 and that loss “would be enough to put any of a number of US facilities and many (union) members’ jobs in jeopardy.” Giti has discussed the tariff rate with the Department of Commerce.
Haley wrote that she was encouraged by what Giti officials told her of the latest meeting with commerce department officials. Giti officials said plans to build the Chester County plant show their commitment to manufacturing and distributing American-made tyres. The plant, Giti officials have said, shows they do not intend to harm the US tyre industry. The tariff, or more formally a countervailing duty, is separate from an anti-dumping investigation by the Department of Commerce of claims that Chinese-made tyres are being sold at below fair market prices in the United States. Some industry observers say the combination of countervailing duty and anti-dumping penalties could drastically increase the price of tyres imported into the US from China.
The average price of a Chinese-made tyre exported to the US is about $36, according to the Department of Commerce. Giti officials have said they “compete fairly” with sales in more than 100 counties. Giti brands include GT Radial, Primewell, Dextero and Runway. Giti recently purchased an 1,100-acre site between between S.C. 9 and the Old Richburg Highway near I-77 for its Chester plant. The sales price was not disclosed. The company anticipates holding a groundbreaking ceremony in January with the plant tentatively scheduled to open in the first quarter of 2016. Giti expects to eventually make about 30,000 passenger and light-truck tyres daily.