As the International Trade Administration Commission (ITAC) readies to make a preliminary determination next month on tyre import tariffs from China, local producers, now at loggerheads with importers, have maintained that higher tariffs would protect jobs.
The South African Tyre Manufacturers Conference (SATMC) says its application to investigate the unfair trade caused by dumped imports of passenger, truck and bus tyres imported from China is part of a sustained effort to rescue the local tyre industry and the livelihoods dependent upon it.
The SATMC’s application to the ITAC asserted that tyres from China were being imported at predatory prices and causing material injury to the domestic manufacturing industry.
They said the South African Revenue Service was dealing with 64 cases of illicit trade into the country related to the tyre industry.
“The SATMC is not against healthy trade and competition at fair prices, but rather against tyres designed and manufactured in China that are imported unfairly into South Africa at unsustainable, rock-bottom rates. This limits the competitiveness of domestic manufacturers, who employ more than 6 000 people directly in South Africa and create indirect employment opportunities for more than 19 000 people,” Nduduzo Chala, Managing Executive of the SATMC, said.
The SATMC, which represents the four major tyre producers, namely Bridgestone, Continental, Goodyear and Sumitomo, says over 70 percent of tyres sold by its members are produced in the country.
In opposing the SATMC application, the Tyre Importers Association of South Africa (Tiasa), the National Taxi Alliance (NTA) and the Road Freight Association (RFA) said the taxi industry would be hit hardest, with mini-bus tyre prices increasing by 41 percent while truck and bus tyres would go up by 17 percent.
Charl de Villiers, the chairperson of Tiasa, said almost 3 200 tyre products were sold in the country, while the applicants, according to their own price lists, collectively imported 80 percent of the variety of tyres that they sold.
The investigation by ITAC could lead to import duties being levied on the imported tyres from China. Similar action has been taken in countries such as India, Nigeria, the United States and the United Kingdom in order to protect local industry and save jobs.
Renai Moothilal, Executive Director of the National Association of Automotive and Allied Manufacturers (NAACAM), said the domestic tyre manufacturers are a significant part of the SA automotive manufacturing value chain, and any production losses they face as a result of products being dumped into the country have the potential to negatively impact localisation and job levels, which is contrary to the objectives of the SA Automotive Masterplan 2035.
“The four manufacturers have made sizeable investments into upping their domestic capacity, but this continues to be eroded as rising imports adversely impact industry capacity utilisation,” Moothilal said.
The ITAC investigation, initiated on 31 January 2022 - is currently in its preliminary phase. Responses received are being assessed in line with World Trade Organization and domestic regulatory and legislative criteria.
The next procedural step in the investigation would be a preliminary determination by ITAC, which is expected to be issued in August.
The ITAC investigation is required to be finalised within 18 months from the date of initiation, with a final determination expected to be made in early 2023.