Tire Retread & Repair Bureau (TRIB) managing director, David Stevens, has testified before the Section 301 Committee of the Office of the US Trade Representative (USTR) at the US International Trade Commission on the impacts low-cost, low-quality Chinese truck and bus tires are having on the retread industry in the USA.
Commenting specifically on the tariff subheadings related to new and retreaded tires for trucks and buses (4011.20.10, 4011.20.50, 4012.12.40, 4012.12.80), Stevens said, “This industry and its US employees are under severe threat from low-cost, low-quality truck tires being imported from China.”
According to Stevens, retreading has historically represented 50% of the commercial truck tire replacement market in the USA. “But since 2013, the compound annual growth rate of the commercial truck tire replacement market has been 5.4% while the retread industry has declined by 2.1%.”
This decline in the retread industry is, said Stevens, driven by low-cost, low-quality Chinese truck tire imports. “Retread manufacturers and supporting industries have had to lay-off employees, reduce hours, and close their businesses in the face of this unfair competition.
“The average sales price of that tire produced by US tire manufacturers across multiple quality tiers is US$231. The cost of production for that tire – material and variable labor costs only – is US$135. US retailers can buy that same size tire from Chinese manufacturers for US$125 and then sell them for US$170. That same tire sold by Chinese manufacturers in their own country is sold for between US$180 and US$220 per tire.”
Stevens believes this affects the US retread industry because the cost savings for a retreaded tire compared to a new tire have historically been around 40-50% less than the cost of a quality new tire.
“With the price point of these low-cost, low-quality Chinese tires getting closer to the price of retreaded tires, many customers are looking only at price, instead of total cost of ownership, and choosing to buy the Chinese tires,” Stevens said. “However, these low-cost, low-quality tires will not last as long nor will many of their casings be retreadable.
“A combination of quality new tires and retreaded tires provides the lowest cost-per-mile for their businesses. This is why 100% of the 100 largest trucking fleets in the USA use retreaded tires in their operations and time-sensitive operations such as UPS, FedEx, and the US Postal Service continue to utilize retreaded tires.
“Retreaded tires are safe and reliable products that go through rigorous testing and manufacturing processes, and retreaded tires should be used in more applications to drive economic and environmental savings. These low-cost, low-quality tires from China cannot be retreaded and will start to create problems in the tire recycling industries as well as creating local problems with illegal tire dumping and tire piles in landfill.”