The Tyre Importers Association of South Africa (Tiasa) said on Tuesday that it had no choice but to go the legal route in a bid to prevent provisional tyre anti-dumping duties despite the probe by Trade Administration Commission (Itac) being still in preliminary stages and open to public comment later on.
This as the SA Tyre Manufacturers Conference (Satmc) says Tiasa may have jumped the gun on taking the legal route amid an industry battle over potential anti-dumping duties on imported tyres.
Tension in the tyre industry spilled over on Tuesday after Tiasa announced it had launched a double-pronged court bid as it opposes the application by Satmc to tax authorities to impose an anti-dumping duty on Chinese imports.
Tiasa said it had applied to court to compel the International Itac and Satmc to disclose critical information being withheld with respect to Satmc’s application for the imposition of anti-dumping duties on imported tyres, and to challenge the manner in which the Itac is conducting the investigation.
Satmc – made up of Continental, Bridgestone, Goodyear and Sumitomo – recently applied to Itac for the imposition of substantial additional duties of between 8 percent and 69 percent on passenger, taxi, bus and truck vehicle tyres imported from China. Import duties of between 25 percent and 30 percent are already levied on tyres.
Satmc said it had noted the court application of Tiasa.
It said it had applied to Itac for an investigation, and provided evidence to support the position that tyres imported from China at unfairly low prices were causing material injury to the local industry.
Satmc continued to co-operate with Itac and had provided all required information to Itac to support the investigation, it said.
“Satmc has received Tiasa’s Notice of Motion, which is currently being addressed. As the Satmc, we believe that we should respect this process,” it said.
Satmc said there were several steps to the process.
– The investigation that was initiated on January 31 and was ongoing.
– The conclusion of the preliminary phase of the probe was awaited; thereafter, a preliminary report would be published setting out Itac’s preliminary decision.
– Interested parties would then have 14 days from the date of publication of the preliminary report to comment in writing to Itac.
– The Itac investigation would then continue with its final investigation phase, during which Itac would review all interested parties’ comments and verify the information that was submitted before issuing an Essential Facts letter.
– This would be followed by Itac’s Final Determination, which must be published on or before July 31, 2023.
However, Donald MacKay, the CEO of XA Global Trade Advisors, said although Satmc was correct when it said interested parties would have 14 days from the date of publication of the preliminary report to comment in writing to Itac, Itac could impose provisional duties in that preliminary report which could be announced any time.
These provisional duties would remain in place until July 31, 2023.
MacKay said provisional duties were often the case – and over that period much damage could be done.
“Indeed, if Itac decides to impose provisional duties at the maximum duty percentage requested by Satmc, we could see price increases range from 41 percent for taxi tyres, 38 to 40 percent for passenger tyres and an average of 17 percent for truck and bus tyres. These increases will have dire consequences for commuters, the transport sector, and consumers, who are struggling with climbing inflation.
“Tiasa is unable to properly oppose Satmc’s application – and, therefore, the imposition of provisional duties by Itac – without the information it is asking for, i.e. Satmc concedes that, in addition to manufacturing tyres locally, it also imports tyres, but refuses to disclose what they import, from where, and for what reason,” he said.
Tiasa said this information was critical, as causality was a foundational principle of an anti-dumping case. In other words, it was necessary to prove that any injury to the local industry must have been caused by the dumping, and not by something else.
He said it was not clear why Satmc was refusing to disclose how many tyres they import, from where, what the costs are, and why they choose to import tyres.
“We can only speculate that perhaps the multinationals involved in the application – Continental, Bridgestone, Goodyear and Sumitomo, all of whom manufacture tyres abroad – want to shift imports from China (the cheapest producer) to other markets.
“What we are sure about is that if they do succeed in shutting down or reducing the Chinese market for South Africa through the imposition of duties, they will not be setting up manufacturing facilities here, but will continue to import from other markets, all of which are more expensive producers than China.
“The result is that South African motorists, taxi companies, the car rental sector, trucks, buses and logistics companies will end up seeing a steep hike in the cost of tyres,” MacKay said.
Meanwhile, Itac said yesterday it could confirm that a court application had been received and the organisation was in the process of obtaining advice from its legal representatives regarding a position.
“The matter is sub judice and therefore it would be inappropriate for Itac to comment any further at this stage,“ it said.
BUSINESS REPORT