South Africa imposes anti-dumping duty on Chinese tyres

South Africa has decided to impose a 38.3% duty on vehicle tyres imported from China as an anti-dumping measure. It will be effective for six months until 8 March 2023.

The move comes after the International Trade Administration Commission of South Africa (ITAC) found sufficient evidence of dumping (a practice where a product is sold in a foreign country for less than the fair price it would receive locally) following a complaint lodged by the South African Tyre Manufacturers Conference (SATMC) – a body that includes Bridgestone, Continental, Goodyear, and Sumitomo which together account for the domestic production of tyres in the Southern African Customs Union (SACU). While SATMC welcomed the preliminary ruling, several industry bodies warned of severe inflation implications as higher tyre prices would have to be absorbed by consumers and businesses. The anti-dumping duty on Chinese tyres after all will be levied over and above the hefty import duties on imported tyres - 30% for car tyres and 25% on bus/truck tyres. South Africa’s Road Freight Association (RFA) stated that the additional duty could drive up the cost of transportation of goods by at least 8%. “This means that, despite the dire economic situation in the country, consumers will pay more for goods, including the basic basket of everyday food, transport and medicines. This will drive inflation – if not higher, it will definitely hold off any decreases from occurring a lot sooner than we had hoped.”

Those who oppose ITAC’s determination also pointed out that tyres are imported because domestic producers don’t have capacity to meet demand. According to Charl de Villiers, the chairperson of the Tyre Importers Association of South Africa, local manufacturers import a significant volume of stock themselves. South Africa’s truck tyre manufacturing capacity, for instance, is only about 600,000 units a year, with demand being 1.2m to 1.4m.

ITAC’s preliminary report indicates that the alleged dumped imports from China comprise a significant portion of total imports in all eight tyre categories – the lowest being 40.84% and the highest 85.62%.

The Commission only made a preliminary determination, with its final decision expected next year. Imports from countries other than China – including Korea and Japan – will continue unaffected. The move is seen as something of a blow to China, which has been South Africa’s largest trading partner for 13 consecutive years, with bilateral trade reaching over US$54bn in 2021.

 

References

‘Job fair 2022 successfully held by Chinese enterprises in South Africa’, Ministry of Foreign Affairs of the People’s Republic of China, 15 April 2022

‘Tyre prices: Import duty hikes may inflate costs’, eNCA, 27 July 2022

‘Associations worry import tariff increases will add to rising transport costs’, Engineering News, 26 July 2022

‘SATMC welcomes preliminary tyre dumping determination by ITAC’, SATMC, 08 September 2022

‘Department of Trade, Industry and Competition stabs consumers with huge tyre levy hike’, Road Freight Association, 09 September 2022

‘Report no, 700’, International Trade Administration Commission of South Africa, 25 August 2022

‘Higher anti-dumping duties imposed on tyres from China’, Moneyweb, 13 September 2022