Mexico's preliminary anti-dumping ruling on Chinese tires confirmed

On April 8, it was reported that Mexico recently launched an anti-dumping investigation against Chinese semi-steel tires. Preliminary ruling results showed that Chinese passenger cars and light truck tires pose a threat of damage to Mexico's Chinese tire industry. However, it is worth noting that during the period of about half a year from the preliminary ruling to the final ruling, the Mexican authorities decided not to impose provisional anti-dumping duties on relevant Chinese tire products.

It is reported that the main affected by the anti-dumping investigation are several tire companies in Shandong, China, and some of them have been convicted of dumping behavior. Mexico has provided companies with a deadline of 20 working days to review the preliminary ruling results and submit feedback.

According to the Carbon Black Industry Network, according to overseas media reports, the weighted average dumping margin of Mexico's preliminary ruling is Shandong Linglong 18.28%; Shandong Changfeng 7.16%; Zhengdao Tire, Zhaoqing Junhong, Wanli Tire and Shandong Haohua are all 32.24%. For other companies that did not participate in the lawsuit, the maximum preliminary ruling margin, that is, 32.24%, will be applicable, and the weighted average dumping margin is US$6.28/article.

This ruling is mainly based on Mexico's statistics on China's tire imports and consumption. From July 2019 to June 2022, Mexico's imports of tires from China surged by 61%, while Mexico's local consumption of Chinese tires also increased from 23.3% to 27.9%. Surveys show that the sales share of domestically produced tires in Mexico has dropped significantly due to the influx of Chinese tires, mainly due to the high cost performance of Chinese tires. Although Chinese tires have filled the diversified demand in Mexico's replacement market, especially in the current high-inflation environment, where consumers are increasingly pursuing cost-effective products, Mexico still made the above damage ruling.

Faced with this situation, Chinese tire companies did not choose to back down, but actively prepared to respond. Although Chinese tire companies have encountered many unfavorable rulings in past anti-dumping investigations, history has also proved that by actively appealing, companies may obtain more favorable tax rates. Taking the 2021 double-reverse case of semi-steel tires in the United States as an example, after two years of unremitting efforts, the double-reverse tax rates of most Chinese tire companies have been greatly reduced. Therefore, it is expected that companies affected by anti-dumping duties will also actively submit complaints, hoping to reduce the tax burden pressure.

At present, various tire companies are intensively preparing relevant materials in order to file strong complaints before the final review deadline of May 6. The final result of this trade friction will have a profound impact on the tire industries of China and Mexico and even the global tire market.