US Tariffs on Chinese Tires and their Effects on South Korean Tire Exports

Yongwon Cho ()
Additional contact information
Yongwon Cho: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr

No 18-19, Industrial Economic Review from Korea Institute for Industrial Economics and Trade

Abstract: The U.S. Department of Commerce has imposed steep anti-dumping duties on Chinese passenger and light truck tires. The U.S. International Trade Commission (USICT) invoked a China-specific safeguard to apply punitive duties ranging from 25 to 35 percent on imports of Chinese passenger and light truck tires between 2009 and 2012 to limit imports of low-end products from Chinese tire producers. Again in 2015, the ITC voted in favor of issuing anti-dumping duties averaging 31 percent on Chinese tire imports, deciding to table the case for sunset review in 2020. The reasoning behind the decision was that the U.S. government believed Chinese tire industry had been benefitted from Beijing’s unfair subsidies above the level the U.S. government allowed. If we focus on trade performance alone, the U.S. government’s decision to raise duties on Chinese tire imports has benefitted South Korean tire producers. Chinese tire manufacturers used to hold a considerable share of the U.S. market owing to their price-competitiveness, but with additional duties averaging 31 percent imposed on Chinese tire imports in the U.S., the prices for Chinese tires went up. This led to an increase in import volumes for tires from South Korea and Thailand, both of which compete with Chinese tires in the U.S market, and firms from both nations gained market share. However, it is hard to say that South Korean and Thai tire manufactures are competing in the same market, when we consider unit prices of their tire exports to the U.S. The fact is that unit prices for tire exports to the U.S. from China, Thailand and South Korea are different: Chinese and Thai tires are cheaper than Korean tires. In light of the circumstances, this study quantitatively analyzes the impact of anti-dumping duties imposed by the U.S. government on imported Chinese tires. In doing so, this study aims to statistically verify whether South Korean tire producers have benefited from U.S. anti-dumping measures. Adding to that, it measures substitute relationships between tires from China, Thailand and South Korea, major competitors in the U.S tire market, to project the impact of possible changes in duties on Chinese tires on the export volume of South Korean tires to the United States.

Keywords: tire manufacturing; tire industry; tire exports; US-China conflict; trade protectionism; tariffs; export duties; anti-dumping duties; export subsidies; export policy; trade policy; China; Korea (search for similar items in EconPapers)
JEL-codes: F18 L62 O53 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2018-10-31
References: Add references at CitEc
Citations:

Downloads: (external link)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4200186 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:kieter:2018_019

Access Statistics for this paper

More papers in Industrial Economic Review from Korea Institute for Industrial Economics and Trade Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea. Contact information at EDIRC.
Bibliographic data for series maintained by Aaron Crossen ().