The exceptions: what’s not covered by US tyre import tariffs

The biggest exception includes tyres made for trailers and caravans, but there are a long list of stipulations. However there are other interesting exceptions too. (Photo courtesy of The Caravan Club

When is a tariff-able tyre not subject to an import tariff? When there are exceptions. With the latest round of US tyre import tariffs aimed squarely at imports of Chinese-produced tyres, it is useful to know what isn’t covered and why.

Following the news that the preliminary ruling is effective 1 December 2014 and retroactive for 90 days prior to this date, further details of what is and what isn’t covered by the rules have emerged. But first a couple of clarifications. There are two categories of import duties that the US government has and is deliberating over. Details of the first – countervailing duties – have already been reported and preliminarily decided upon. All things being equal, the final verdict for these will be issued “no later than 6 April 2015”. Within 45 days after this, the US International Trade Commission will make its own decision about what anti-dumping import tariffs to impose. Therefore total tariffs could be very substantial.

What we know so far is that the base rate for the first of the two charges (countervailing duties) has been set at 15.69 per cent and covers all passenger car and light truck tyres produced in China and imported into the US. The exceptions to this are Giti Tire (Fuijian) Co., Ltd and its directly related companies, which have to pay 17.69 per cent. Shandong Yongsheng Rubber Group has been lumped with a punitive level duties – 81.29 per cent. The third exception to this rate is Cooper Kunshan Tire Co., Ltd, which gets the lighter-touch figure of 12.5 per cent. Interestingly, as with Giti, it includes “cross-owned companies” namely Cooper Chengshan. Now that Chengshan has bought out Cooper’s shares in this particular joint venture it begs the question as to whether or not the more lenient tariffs were a result of the connection with Chengshan or in spite of it. With this in mind, one has to wonder whether this figure may go up or down by the time of the final deliberation in April.

Furthermore the US Department of Commerce said it was investigating a further nine programmes, suggesting there could be other variations from the 15.69 per cent baseline. And based on what we have seen so far, these could go either above or below the above figure.

Light trailer tyres are exempt

The biggest loophole is on products as light vehicle trailer tyres. Tyres designed for use on trailers attached to the back of vehicles covered by the tariffs are excluded from countervailing duties. Trailer service tyres (or ST tyres as they are known in the US ) are being exempt on the basis that they operated under reduced speed conditions and are designed to carry extra load. To give an idea of the kinds of things referred to, think of smaller trailers, caravans and horseboxes etc.

Writing in a blog post dated 25 August and therefore long before the preliminary ruling, US National Association of Trailer Manufacturers (NATM) executive director Pam O’Toole Trusdale wrote that the association had made “significant progress towards our goal of getting specialty trailer tyres excluded from the investigation”.

The blog explains that in mid-August legal firm K&L Gates filed comments on behalf of NATM with the US Department of Commerce on the matter.  At the time the initial complainant the USWA trade union rebutted the comments received from NATM and other organizations. However, the USWA Trusdale also wrote that the union at least partially “agreed with NATM’s position that certain specialty trailer tyres should be excluded from the scope of the investigation.”

According to US news sources, by the time of the preliminary decision NATM’s view was being supported by the Recreation Vehicle Industry Association (RVIA) and over a dozen distributors of specialty trailer tyres. The result is that Depart of Commerce has issued a specific exemption, which means tyres have to meet the following stipulations in order to qualify:

  • The speed rating is moulded on the sidewall must not exceed 81 mph or an M-rating.
  • The size designation moulded into the sidewall must be listed in the ST sections of the Tire and Rim Association (TRA) Year Book
  • “ST” must be mouded into the tyre’s sidewall as part of its size designation;
  • Tyres much include a prominent warning text such as: “For Trailer Service Only” or “For Trailer Use Only”;
  • The load index moulded on the sidewall must meet or exceed those load indexes listed in the TRA Year Book for the relevant ST tyre size

Other exemptions

US government documents also show that motorsport tyres, part worn and retreaded tyres, non-pneumatic tyres, T-rated temporary-use spares (provided they’re marked with a “T” marking and a speed rating of not more than M – 81 mph). “Off-road use” products such as ATV, agricultural and industrial/implement tyres are also exempt.

For the purposes of the ruling motorsports tyres are defined as “racing car tyres” not bearing the DOT marking on the sidewall and with ZR in in size designation.

Off road tyres are described as: carrying the relevant size designation and load index moulded into the sidewall and being listed in the off-the-road, agricultural, industrial or ATV section of the Tire and Rim Association Year Book. As with the trailer tyres it must carry a warning marking prominently moulded on the sidewall such as: “Not For Highway Service” or “Not for Highway Use”. In addition the tyre’s speed rating should be moulded on the sidewall, indicating the rated speed in mpg or a letter rating as listed by the Tire and Rim Association Year Book – and this speed rating should not exceed G or 55 mph. Finally it must feature “a recognizable off-road tread design.”

However it is also worth pointing out that Chinese produced non-pneumatic industrial and off-road tyres bearing all these characteristics also have a history of swingeing US import tariffs.

One interesting detail worthy of further research is the exemption of “new pneumatic tyres”. These are described as being made of rubber, of a size that is not listed in the passenger car section or light truck section of the Tire and Rim Association Year Book”. And these therefore leave a potential crack in the door for new or unusual tyres sizes – perhaps tuning fitments such as very large diameters or very low profile tyres.

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