The South African Tyre Manufacturers Conference (SATMC) applied for anti-dumping duties on car passenger, truck and bus tyres from China. ITAC initiated the investigation on 31 January 2022 and interested parties have until between 9 and 11 March to respond. Off to a wobbly start, the gazette contained an error and got republished on 9 February (nothing of significance and it doesn’t alter the deadline).
Tyres worth R5.7bn were imported into South Africa in the investigation period (August 2020 to July 2021), with 47% of that coming from China (R2.7bn). That is about 5m tyres.
But before you get too excited, a lot of tyres from China does not equal dumping. This is a complicated case.
The 4 companies which brought the application (and the sole members of the SATMC) are Good Year, Dunlop, Continental and Sumitomo, the same 4 companies currently under scrutiny at the Competition Commission. Companies who are also importers from China (although they have claimed confidentiality on how much and why they imported). More on this later in the investigation.
The duties requested and the volumes imported are as follows:
Now imagine these duties are imposed and the price of tyres surges. The cost of everything transported will rise. But it is not clear at all that production will rise. The multinationals, who own all the local factories, also own factories elsewhere in the world. We don’t know how much they imported from China, but we do know they could shift at least some of their procurement to other regions if duties are imposed. This would have the effect of removing current import competitors, who are dependent on Chinese supply, and allow more expensive tyres from, say, the EU to be supplied instead.
Now get hold of us at XA!
This is what we do better than anyone else. If you wish to oppose this application, drop us a note at info@xa.co.za.
The current deadline to respond is between 9 and 11 March.