Chinese tire exports decline after WTO ruling

BEIJING— Chinese manufacturers have been hit hard. The US is now entitled to impose additional duties on imports of Chinese tires, the World Trade Organization said on Sept 12, upholding a 35 percent tariff ruling made in 2009.

Eastern Shandong province is a major tire exporter. One third of its overseas sales are to the US. More than 30 companies in the province export over $10 million worth of tires annually. In the first year when the US slapped punitive tariffs on Chinese cars and light trucks, Shandong's exports plunged by about 25 percent, equaling a loss in sales of about nearly $80 million. Mounting pressure has give exporters little reason for optimism.

Wang Hai, CEO of Doublestar Group Co Ltd, said, "The United States is our major export country. We used to export $50 million worth of tires for cars and light trucks, now only $ 5 million, one-tenth of what it used to be."

Zhejiang, another eastern province is also experiencing a similar fate. It seems there is no end in sight to the huge losses. Shen Jinrong, CEO of Zhongce Rubber Co Ltd, said, "Our exports dropped 20 percent last year, it's worth $2 million to $30 million. We saw another 25 percent dip in the first 8 months this year from a year earlier."

Shen has begun to adjust his business strategy after nearly two years of struggle. He set up his first vehicle tires factory in Thailand this summer. With Thailand rubber used as the raw material, Shen hopes to reduce the production cost and more importantly, to avoid the trade tariffs.

September 13, 2011

Source: China Daily