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In v. Nos. A-570-016 a n d C-570-017

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PUBLIC DOCUMENT

The Hon or a ble Pe n n y Pr it zke r
S e cr e t a r y of Comme r ce
At t e n t ion :Impor t Ad min ist r a t ion
Ce n t r a lRe cor d s Un it , Room 1870
U.S . De pa r t me n t of Comme r ce
In t e r n a t ion a lTr a d e Ad min ist r a t ion
14t h S t r e e t a n d Con st it ut ion Ave n ue , N.W.
Wa shin gt on , D.C. 20230
VIA HAND DELIVERY
The Hon or a ble Lisa R. Ba r t on
S e cr e t a r y
U.S . In t e r n a t ion a lTr a d e Commission
500 ES t r e e t , S .W.
Wa shin gt on , DC 20436
Re : Pe tition sfor the Imposition of An tid umpin gDutie s a n d Coun t e r va ilin gDut ie s
on Ce r ta in Pa sse n ge r Ve hicle a n d Light Tr uck Tir e sfr omthe Pe ople 's
Republic of Chin a
De a r S e cr e t a r y Pr it zke r a n d S e cr e t a r y Ba r t on :
On be ha lf of t he Un it e d S t e e l, Pa pe r a n d For e st r y, Rubbe r , Ma n ufa ct ur in g, En e r gy,
Allie d In d ust r ia la n d S e r vice Wor ke r s In t e r n a t ion a lUn ion , AFL-CIO, CLC ("US W" or
"pe t it ion e r "), w e r e spe ct fully submit t o t he U.S . De pa r t me n t of Comme r ce ("t he De pa r t me n t ")
a n d t he U.S . In t e r n a t ion a lTr a d e Commission ("t he Commission ") t he e n close d pe t it ion s for t he
imposit ion of a n t id umpin g d ut ie s a n d coun t e r va ilin g d ut ie s on U.S . impor t s of Ce r t a in Pa sse n ge r
Ve hicle a n d Light Tr uck ("PVLT") Tir e s fr om t he Pe ople 's Re public of Chin a ("Chin a "). The
FAM
e mbe r, In t e r n a t ion a lS ocie ty of Pr ime r us La w Fir ms
The Honorable Penny Pritzker
The Honorable Lisa Barton
June 3 , 2014
Page 2
USWis a recognized union which is representative of the domestic industry engaged in the
manufacture of PVLT tires in the United States, within the meaning of 19 U.S.C. 1677(9)(D).
These petitions are organized as follows:
Volume I General I ssues and I njury;
Volume I I Antidumping Duty Petition; and
Volume I I I Countervailing Duty Petition.
Certification of Simultaneous Filing: Pursuant to section 3 51.202(c) of the Department's
regulations and section 207.10(a) of the Commission's regulations, we hereby certify that the
petitions and all required copies were filed simultaneously today with both the Department and
the Commission.
Certifications: We attach to this cover letter all appropriate certifications required by the
regulations. These include the requisite company and counsel certifications regarding the
completeness and accuracy of the information contained in the petitions.
I f you have any questions regarding this petition, please contact the undersigned.
Trade Consultants:
Jessica Wang
David De Prest
STEWART AND STEWART
Terence P. Stewart, Esq.
Geert De Prest, Esq.
Elizabeth J. Drake, Esq.
Philip A. Butler, Esq.
Jennifer M. Smith, Esq.
Stephanie M. Bell, Esq.
Nicholas J. Birch, Esq.
STEWART AND STEWART
2100 M Street, NW, Suite 200
Washington, DC 2003 7
(202) 785-4185
Counselfor Petitioner
UNION CERTIFICATION
I, Tom Conway, International Vice President (Administration), currently employed by
the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and
Service Workers International Union, AFL-CIO, CLC ("USW), certify that I prepared or
otherwise supervised the preparation of the attached submission of Petitions for the Imposition of
Antidumping Duties and CountervailiniDuties on Certain Passenger Vehicle and Light Truck
Tires from the People's Republic of Ching filed on June 3 . 2014 on behalf of the USW. I certify
that the public information and any business proprietary information of the USW contained in
this submission is accurate and complete to the best of my knowledge. I am aware that the
information contained in this submission may be subject to verification or corroboration (as
appropriate) by the U. S. Department of Commerce. I am also aware that U. S. law (including, but
not limited to, 18 U. S. C. 1001) imposes criminal sanctions on individuals who knowingly and
willfully make material false statements to the U. S. Government. In addition, I am aware that,
even if this submission may be withdrawn from the record of the AD/CVD proceeding, the U. S.
Department of Commerce may preserve this submission, including a business proprietary
submission, for purposes of determining the accuracy of this certification. I certify that a copy of
this signed certification will be filed with this submission to the U. S. Department of Commerce.
COUNSEL CERTIFICATION
I, Geert De Prest, with the Law Offices of Stewart and Stewart, counsel to the United
Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service
Workers International Union, AFL-CIO, CLC ("USW"), certify that I have read the attached
submission of Petitions for the Imposition of Antidumping Duties and Countervailing Duties on
Certain Passenger Vehicle and Light Truck Tires from the People's Republic of China filed on
June 3, 2014 on behalf of the USW. In my capacity as counsel of this submission, I certify that
the information contained in this submission is accurate and complete to the best of my
knowledge. I am aware that U.S. law (including, but not limited to, 18 U.S.C. 1001) imposes
criminal sanctions on individuals who knowingly and willfully make material false statements to
the U.S. Government. In addition, I am aware that, even if this submission may be withdrawn
from the record of the AD/CVD proceeding, the U.S. Department of Commerce may preserve
this submission, including a business proprietary submission, for purposes of determining the
accuracy of this certification. I certify that a copy of this signed certification will be filed with
this submission to the U.S. Department of Commerce.
CERTIFICATION OF COUNSEL
City of Washington
SS
District of Columbia
In accordance with section 207.3(a) of the Commission's rules, I, Elizabeth J . Drake, of
the Law Offices of Stewart and Stewart, counsel to Petitioner, the United Steel, Paper and
Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International
Union, AFL-CIO, CLC, certify that (1) I have read the attached submission, (2) based on the
information made available to me by Petitioner, I have no reason to believe that this submission
contains any material misrepresentation or omission of fact, and (3) the information contained in
this submission is accurate and complete to the best of my knowledge.
Dated: J une lie 2014
c-J A--aokJ -
Elizabeth J . Drake
Sullwusibealopd sworn before me this '2- day of J une 2014:
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NOTARY PUBLIC
Inv. Nos. A-570-016 and C-570-017
731-TA- and 701-TA-
BEFORE THE
INTERNATIONAL TRADE ADMINISTRATION
UNITED STATES DEPARTMENT OF COMMERCE
AND THE
UNITED STATES INTERNATIONAL TRADE COMMISSION
In the Matter of:
CERTAIN PASSENGER VEHICLE AND LIGHT
TRUCK TIRES FROM THE PEOPLE'S REPUBLIC
OF CHINA
VOLUMEI:
GENERAL ISSUES AND INJURY
PETITIONS FOR THE IMPOSITION OF ANTIDUMPING DUTIES AND
COUNTERVAILING DUTIES ON BEHALF OF THE UNITED STEEL, PAPER AND
FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND
SERVICE WORKERS INTERNATIONAL UNION, AFL-CIO, CLC
Trade Consultants:
Jessica Wang
David De Prest
STEWART AND STEWART
June 3, 2014
Terence P. Stewart, Esq.
Geert De Prest, Esq.
Elizabeth J. Drake, Esq.
Philip A. Butler, Esq.
Jennifer M. Smith, Esq.
Stephanie M. Bell, Esq.
Nicholas J. Birch, Esq.
STEWART AND STEWART
2100 MStreet, NW, Suite 200
Washington, DC 20037
(202) 785-4185
Counsel for Petitioner
VOLUMEI GENERALISSUES AND INJURY
TABLEOF CONTENTS
I. INTRODUCTION 1
II. GENERALINFORMATION 2
A. ThePetitioner (19 C. F. R. 351. 202(b)(1)) 2
B. The Domestic Like Product and the Domestic Industry (19 C. F. R.
207. 11(b)(2)(i) and (ii), 351. 202(b)(2)) 3
1. Physical Characteristics and Uses 4
2. Interchangeability 4
3. Channels of Distribution 5
4. Common Facilities, Processes, and Employees 5
5. Customer and Producer Perceptions 6
6. Price 6
C. Support for the Petitions (19 C. F. R. 351. 202(b)(3)) 7
D. Other Forms of Relief (19 C. F. R. 351. 202(b)(4)) 10
E. Description of the Subject Merchandise (19 C. F. R. 351. 202(b)(5)) 11
F. Nameof the Country of Manufacture of Subject Merchandise (19 C. F. R.
351. 202(b)(6)) 13
G. Foreign Producers and Exporters (19 C. F. R. 351. 202(b)(7)(ii)(A)) 13
H. Factual Information Relevant to Dumping (19 C. F. R. 351. 202(b)(7)(i)(B)
and (C)) 14
I. Subsidy Allegations and Supporting Factual Information (19 C. F. R.
351. 202(b)(7)(ii)(B) and (C)) 14
J. Volume and Value of Imports (19 C. F. R. 351. 202(b)(8)) 15
K. Importers (19 C. F. R. 207. 11(b)(2)(iii), 351. 202(b)(9)) 15
L. Pricing Products (19 C. F. R. 207. 11(b)(2)(iv)) 15
M. Lost Sales and Revenues (19 C. F. R. 207. 11(b)(2)(v)) 16
HI. MATERIAL INJURY AND THREAT OF MATERIAL INJURY 16
A. Negligibility 18
B. Conditions of Competition 18
1. Demand 18
2 . Supply 2 0
3 . Substitutability 2 1
C. Volume of Subject Imports 2 8
D. Price Effects of Subject Imports 3 2
E. Impact of Subject Imports on the Domestic Industry 40
F. Threat of Material Injury 48
W. CONCLUSION 57
PETITIONS FOR THE IMPOSITION OF ANTIDUMPING AND
COUNTERVAILING DUTIES ON CERTAIN PASSENGER VEHICLE AND
LIGHT TRUCK TIRES FROM THE PEOPLE'S REPUBLIC OF CHINA
VOLUME I GENERAL ISSUES AND INJURY
I. INTRODUCTION
These petitions are filed on behalf of the United Steel, Paper and Forestry,
Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International
Union, AFL-CIO, CLC ("USW"). These petitions seek the imposition of antidumping
and countervailing duties on imports of certain passenger vehicle and light truck tires
("PVLT tires") from the People's Republic of China ("China"), pursuant to sections 701
and 731 of the Tariff Act of 1930, as amended ("the Act"), 19 U. S. C. 1671 et seq. The
USW is a recognized union which is representative of the domestic industry engaged in
the manufacture of PVLT tires in the United States, within the meaning of 19 U. S. C.
1677(9)(D). Based on the information reasonably available to the petitioner and
contained herein, the petitioner believes that imports of PVLT tires from China are being
sold for less than their fair value, are benefitting from countervailable subsidies, and are
causing material injury, or threatening material injury, to the domestic industry producing
PVLT tires.
Volume I of these petitions contains general information (e. g. , the identity of the
petitioner, the domestic industry, industry support, and the description of subject
merchandise) and information supporting allegations that the subject imports are causing
or threatening to cause material injury to the domestic PVLT tires industry. Volume II of
these petitions contains information reasonably available to the petitioner indicating that
PVLT tires from China are being sold in the United States at less than their fair value.
Volume I I I of these petitions contains information reasonably available to the petitioner
supporting allegations that PVLTtires from China benefit from countervailable subsidies.
I I . GENERAL I NFORMATI ON
A. ThePetitioner (19 C.F.R. 351.202(b)(1))
The petitioner is the United Steel, Paper and Forestry, Rubber, Manufacturing,
Energy, Allied I ndustrial and Service Workers I nternational Union, AFL-CI O, CLC
("USW"). The address and telephone number of the USW is:
United Steelworkers
Five Gateway Center
Pittsburgh, PA15222
(412) 562-2400
As explained in more detail in Section I I .C, infra, the USW represents workers employed
at domestic producers of PVLTtires, including the Cooper Tire & Rubber Company
("Cooper"), the Goodyear Tire & Rubber Company ("Goodyear"), Michelin North
America I nc. ("Michelin"), and the Yokohama Rubber Co., Ltd. ("Yokohama").
The USW is thus a recognized union which is representative of the domestic
industry engaged in the manufacture of PVLT tires in the United States. The U.S.
I nternational Trade Commission has previously determined that the USW is a union that
is representative of the domestic PVLTtire industry, and it continues to be today. The
USW therefore qualifies as an interested party under 19 U.S.C. 1677(9)(D). Moreover,
consistent with the statute, Congressional intent, and the agencies' prior practice, a union
'U.S. I nternational Trade Commission, Certain Pass enger Vehicle and Light Truck Tires
FromCh ina, I nv. No. TA-421-7, USI TC Pub. 4085 (July 2009) ("Tires 421 Investigation") at 28
(noting the safeguard petition filed by the USW was filed by a union representative of the
domestic industry). While the China-specific safeguard investigation was governed by a different
statute than these petitions, a number of factual and other determinations made by the
Commission in that investigation are relevant to these petitions and thus cited herein.
1-2
that i s repres entati ve of the domes ti c i ndus try has the ri ght to fi l e peti ti ons on behal f of
that i ndus try under 19 U.SC. 1671a(b)(1) and 1673a(b)(1).2 Congres s has al s o
expres s ed i ts i ntent that uni ons be abl e to fi l e peti ti ons regardl es s of company
parti ci pati on: "{W} orkers , as wel l as compani es , may fi l e and s upport peti ti ons ."3
B. The Domes ti c Li ke Product and the Domes ti c Indus try (19 C.F.R.
207.11(b)(2)(i ) and (i i ), 351.202(b)(2))
There i s a s i ngl e domes ti c l i ke product that i s co-extens i ve wi th the product that i s
the s ubject of thes e peti ti ons : PVLTti res . Ades cri pti on of the s ubject merchandi s e i s
provi ded i n Secti on ILE, bel ow. The names , addres s es , and tel ephone numbers of al l
known domes ti c producers of PVLTti res i s attached at Exhi bi t I-1.
In i ts Chi na-s peci fi c s afeguard i nves ti gati on on PVLTti res , the Commi s s i on
found that domes ti cal l y produced PVLTti res are "l i ke" PVLTti res from Chi na.4 The
Commi s s i on further found that al l domes ti cal l y-produced PVLTti res formed a s i ngl e
domes ti c l i ke product, as the vari ous s i zes and types of ti res , i ncl udi ng ti res produced for
the repl acement and OEMmarkets , are part of a s i ngl e conti nuum of products wi th no
cl ear di vi di ng l i nes . s The Commi s s i on al s o found that al l domes ti c producers of PVLT
ti res , and thei r workers , cons ti tuted the domes ti c i ndus try.6
The domes ti c l i ke product i n thes e i nves ti gati ons s houl d al s o be defi ned as a
s i ngl e l i ke product, cons i s ti ng of al l PVLTti res , co-extens i ve wi th the s cope.
Domes ti cal l y produced PVLTti res are the product whi ch i s "l i ke, or i n the abs ence of
2 Id. See als o Ini ti ati on of Anti dumpi ng Inves tigati ons ; Col or Tel evis i on Recei vers From the
Republi c of Korea and Tai wan, 48 Fed. Reg. 23,879 (Dep't Commerce May 27, 1983).
3 Sen. Rep. 412, 103rd Cong., 2nd Ses s ., 35 (1994).
4 Ti res 421 Inves tigati on at 9.
5 Id.
61d. at 10.
1-3
l i k e , most si mi l ar i n characte ri sti cs and use s wi th, " subje ct PVLT ti re s from Chi na.7
Both the Commi ssi on and the De partme nt of Comme rce consi de r si x factors i n
de te rmi ni ng how to de fi ne the dome sti c l i k e product.8 As e xpl ai ne d i n more de tai l
be l ow, e ach of the se si x factors supports a de te rmi nati on that the re i s a si ngl e dome sti c
l i k e product that i s co-e xte nsi ve wi th the scope .
1 . Physi cal Characte ri sti cs and Use s
Al l PVLT ti re s have the same physi cal characte ri sti cs and use s. The Commi ssi on
has e xpl ai ne d that al l PVLT ti re s "are produce d l arge l y from the same basi c raw
mate ri al s ( e .g., natural and synthe ti c rubbe r, carbon bl ack , oi l s, e tc.) and have the same
basi c compone nts ( e .g., i nne r l i ne r, body pl y, si de wal l be ads, ape x, be l t pack age , tre ad,
and cushi on gum) ."9 The Commi ssi on al so found that al l pne umati c rubbe r ti re s,
whe the r for passe nge r ve hi cl e s or l i ght truck s, "have the same basi c compone nts, as we l l
as the same basi c functi on."1 The Commi ssi on al so found that the re we re no cl e ar
di vi di ng l i ne s be twe e n si ze s or type s of PVLT ti re s.1 1 Fi nal l y, al l U.S. and Chi ne se
PVLT ti re s have the same use to be mounte d on the whe e l s of passe nge r ve hi cl e s and
l i ght truck s.
2 . Inte rchange abi l i ty
Whi l e PVLT ti re s must be of a spe ci fi c si ze to fi t an i ndi vi dual passe nge r ve hi cl e
or l i ght truck , ti re s wi th di ffe re nt fe ature s ( l oad rati ngs, tre ad ware , tracti on, e tc.) can fi t
the same ve hi cl e and be use d i nte rchange abl y. Inde e d, the di re ct mark e ti ng si de -by-si de
7 Se e 1 9 U.S.C. 1 677( 1 0) .
8 Se e, e . g. , Ti mke n Co. v. Un i te d States, 91 3 F. Supp. 580, 584 ( Ct. Ine l Trade 1 996) .
9 Ti res 42 1 In vestigati on at 8.
1 Id. at 1 -4.
1 1 Id. at 9 n.41 .
1 -4
to the same consumers of ti res wi th di fferent features for use on the same vehi cles, as
evi denced i n Exhi bi t 1 - 2 , further confi rms that all types of PVLT ti res are
i nterchangeable.
3 . Channels of Di stri buti on
All si zes and types of PVLT ti res are sold through the same channels of
di stri buti on. In the Chi na- speci fi c safeguard i nvesti gati on, the Commi ssi on found that
both domesti c and Chi nese PVLT ti res were pri mari ly sold to warehousi ng di stri butors,
who i n turn sell to consumi ng contractors or end users.1 2 By defi ni ti on, the same si zes
and types of ti res are sold i n both the OEM and replacement markets, as replacement ti res
must meet the same speci fi cati ons as the OEMti res they are replaci ng.
4. Common Faci li ti es, Processes, and Employees
All types of PVLT ti res share common producti on faci li ti es, producti on processes,
and employees. In i ts Chi na- speci fi c safeguard i nvesti gati on, the Commi ssi on explai ned
that the ti res are made usi ng the same producti on processes and equi pment at the same
faci li ti es and wi th the same workers:
An esti mated 99 percent of ti res are produced usi ng a more
or less conventi onal process, whi ch begi ns wi th the mi xi ng
of speci fi c chemi cals (natural rubber, syntheti c rubber,
carbon black, and other chemi cals) to form vari ous rubber
compounds (e.g., the tread i s made from one compound,
the carcass from another, and the si dewalls from a thi rd).
The compounds are then combi ned wi th the steel cord and
texti les when appropri ate, and the whole i s formed i nto a
speci fi c shape (a "green" ti re). The green ti re i s then
cooked (cured) under pressure at about 2 00 degrees
centi grade (whi ch leads to a non- reversi ble chemi cal
change i n the compound) to form the hard, resi li ent type of
rubber found i n a fi ni shed ti re. Dependi ng on the
i ngredi ents used i n the vari ous compounds, the fi ni shed ti re
1 2 Id. at 9.
I- 5
can provide different properties, including good rolling
resistance, superb grip, and so forth . . . . Virtually all
domestic producers that manufacture the subject tires
produce both passenger vehicle and light truck tires in the
same production facilities using the same production
equipment and production-related workers. 13
This continues to be the case today. As the list of facilities making PVLT tires attached
at Exhibit 1-3 shows, of the 23 plants with the capacity to produce passenger vehicle
and/or light truck tires in the United States in January of 2014, 18 of the plants had the
capacity to produce both passenger vehicle and light truck tires.
5 . Customer and Producer Perceptions
Customers and producers perceive all PVLT tires as similar products with the
same basic physical properties and essential function. While the tires vary in size
depending on the vehicle or light truck onto which they will be mounted, and while tires
may have various design features, the Commission has found that there are no clear
dividing lines between sizes or types of PVLT tires. 14 In addition, while the Commission
found some evidence that there are three "tiers" in the domestic tire market based on
brand and price, it also found that there was no clear dividing line between the alleged
tiers and no consensus as to which types of tires fell into which tiers. 15 For further
discussion of these alleged "tiers," please see Section below.
6 . Price
PVLT tires are offered along a continuum of prices. While larger tires may in
general be more expensive than smaller tires due to the additional materials needed to
13 Tires 421 Investigation at 8 (citations omitted).
'41d. at 9 n. 41.
'5 1d. at 21.
1-6
produce the ti re, there are no clear di vi di ng li nes based on pri ce. As the adverti si ng
materi als attached at Exhi bi t 1-2 show, ti res of the same type and si ze are also avai lable
i n a range of pri ces. In addi ti on, the Commi ssi on has previ ously found that whi le pri ce
has been ci ted as a basi s for di fferent ti ers i n the ti re market, there are no clear di vi di ng
li nes between any alleged pri ce ti ers and no consensus as to whi ch types of ti res fell i nto
whi ch ti ers.16
For all of these reasons, the domesti c li ke product i n these i nvesti gati ons should
be PVLT ti res, a si ngle domesti c li ke product co-extensi ve wi th the scope.
C. Support for the Peti ti ons (19 C.F.R. 351.202(b)(3))
Under the statute, the peti ti oner and any other domesti c producers or workers
supporti ng a peti ti on must account for more than 25 percent of the producti on of the
domesti c li ke product and more than 50 percent of those expressi ng a posi ti on on the
peti ti on.17 Industry support may be measured on the basi s of volume or value, and,
where producti on data i s unavai lable, the Department of Commerce may refer to
alternati ve data that i s i ndi cati ve of producti on levels.18
As far as the peti ti oner i s aware, there i s no publi cly avai lable i nformati on on the
volume or value of PVLT ti res producti on i n the Uni ted States. There i s, however,
publi cly avai lable i nformati on regardi ng the producti on capaci ti es of PVLT ti re
producers i n the Uni ted States. Thi s i nformati on, whi ch i s current as of January 2014, i s
attached at Exhi bi t 1-3. The peti ti oner beli eves that thi s capaci ty data i s i ndi cati ve of
producti on levels. In i ts Chi na-speci fi c safeguard i nvesti gati on on PVLT ti res from
1 6 Id.
17 19 U.S.C. 16 71a(c)(4)(A); 16 73a(c)(4)(A).
18 19 C.F.R. 351.203(e)(1).
1-7
China, the Commission found that the domestic PVLT tir es industr y oper ated at capacity
utilization r ates r anging fr om 85.8 to 96.3 per cent fr om 2004 thr ough 2008.19 The
Depar tment has pr eviously r elied on capacity as an alter native sour ce of data indicative
of pr oduction volumes."
To deter mine the amount of pr oduction ( or , in this case, capacity) accounted for
by the USW, the Depar tment of Commer ce's r egulations r equir e the Depar tment to
"consider the positions of wor ker s and management r egar ding the petition to be of equal
weight."21 The r egulations dir ect the Depar tment to assign a single weight to the
positions of wor ker s and management accor ding to the pr oduction "of the fir m in which
the wor ker s and management ar e employed."22
This r egulation is consistent with the Statement of Administr ative Action
accompanying the Ur uguay Round Agr eements Act:
The Administr ation intends that labor have equal voice
with management in suppor ting or opposing the initiation
of an investigation. Commer ce's implementing r egulations
will make clear that in consider ing the views of labor ,
Commer ce will count labor suppor t or opposition as being
equal to the pr oduction of the domestic like pr oduct of the
fir ms in which the wor ker s ar e employed.
23

Commer ce fur ther explained its pr actice in the pr omulgation of the r ule r egar ding wor ker
suppor t:
19 Tir es 421 Investigation at Table III- 1.
29 Office of AD/CVD Enfor cement, Counter vailing Duty Investigation Initiation Checklist,
Cer tain Steel Gr ating fr om the People 's Republic of China ( June 22, 2009), at Attachment II, 6.
See also Office of AD/CVD Enfor cement, Initiation Checklist, Counter vailing Duty Petition on
Cer tain New Pneumatic Off- the-Road Tir esfr om the Pe ople 's Republic of China ( July 30, 2007)
at Attachment II, Exhibit A n.2.
21 19 C.F.R. 351.203( e)( 3).
22
23 Statement of Administr ative Action ( "SAA"), H.R. Doc. No. 103- 316, Vol. I ( 1994) at 862.
1- 8
Thus, for example, if a union expressed support for a
petition, the Department would consider that support to be
equal to the production of all of the firms that employ
workers belonging to the union. On the other hand, if
management and workers at a particular firm expressed
opposite views with respect to the petition, the production
of that firm would be treated as representing neither
support for, nor opposition to, the petition.
2 4

In accordance with this regulation, the Department's consistent practice is to
count the production of firms in which petitioning union members are employed as
supporting petitions when the management of the firm in question takes no position on
the petition.
2 5
The USWrepresents workers at four firms that produce PVLT tires in the
United States: Cooper, Goodyear, Michelin, and Yokohama.2 6 Those four firms have a
daily production capacity of 4 30.3 thousand PVLT tires per day, a volume equal to 78.6
percent of the domestic industry's total daily production capacity.
2 4 Anti dumpi ng Duti es; Co untervai li ng Duti es, 61 Fed. Reg. 7307, 7314 (Dep't Commerce
Feb. 2 7, 1996).
2 5 See, e. g. , Import Administration, Office of AD/CVD Enforcement, Countervailing Duty
Investigation Initiation Checklist, Dri ll Pipe fro m the People 's Republic of Chi na (Jan. 2 0, 2 010)
at Attachment II, n.14 . See also Office of AD/CVD Enforcement, Initiation Checklist,
Lightweight Thermal Paper fro m the People 's Republic of Chi na (Oct. 2 007) at Attachment II, 8
n.12 ; Office of AD/CVD Enforcement, Initiation Checklist, Co untervai li ng Duty Peti ti o n o n
Certai n New Pneumati c Off- the- Road Ti res fro m the People 's Republic of Chi na (July 30, 2 007)
at Attachment II, Exhibit An. 1.
2 6 See Exhibit 1- 3.
1- 9
Daily PVLT Tire Production Capacity27
Firms Repres ented by USWThous and PVLT Tires/ Day
- Cooper 97
- Goodyear 1 3 8
- Michelin 1 68 . 5
- Yokohama 26. 8
Subtotal USWFirms 43 0. 3
Other Domes tic Producers 1 1 6. 9
Total 547. 2
Support Calculation 78. 6%
Thus, the public information reasonably available to the petitioner demonstrates
that the petitioner accounts for over 25 percent of domestic production and 1 00 percent of
the production of producers or workers who have expressed a position on the petitions.
The petitioner thus exceeds both industry support thresholds in the statute. 28
Should the management of one or more domestic PVLT tire producer oppose
these petitions, we attach at Exhibit 1 - 5 information indicating such opposition should be
disregarded consistent with 1 9 U. S. C. 1 671 a(c)(4)(B) and 1 673a(c)(4)(B).
D. Other Forms of Relief (1 9 C. F. R. 351 . 202(b)(4))
The petitioner has not filed for relief from imports of the subject merchandise
under section 337 of the Act (1 9 U. S. C. 1 337), sections 201 or 301 of the Trade Act of
1 974 (1 9 U. S. C. 2251 and 241 1 ), or section 232 of the Trade Expansion Act of 1 962
(1 9 U. S. C. 1 862).
A petition for China- specific safeguard relief from imports of the subject
merchandise was filed by the USWon April 20, 2009. 29 The Commission determined
that PVLT tires from China were being imported in such increased quantities or under
27 See Exhibit 1 - 4.
28 1 9 U. S. C. 1 671 a(c)(4)(A); 1 673a(c)(4)(A).
29 Tires 421 Inves tigation at 3.
I- 1 0
such conditions as to cause market disruption to the domestic industry, and it
recommended that a remedy be imposed.3 On September 11, 2009, President Obama
issued a proclamation imposing three years of duties on imported PVLT tires from China;
a duty of 35 percent effective from September 26, 2009 to September 25, 2010, a duty of
30 percent from September 26, 2010 to September 25, 2011, and a duty of 25 percent
from September 26, 2011 through September 25, 2012.31 The safeguard duty has now
expired.
E. Description of the Subject Merchandise (19 C.F.R. 351.202(b)(5))
The scope of these investigations is certain passenger vehicle and light truck tires.
Passenger vehicle and light truck tires are new pneumatic tires, of rubber, with a
passenger vehicle or light truck size designation. Passenger vehicle and light truck tires
are suitable for use on motor cars, including but not limited to sedans, station wagons,
sport utility vehicles, minivans, and vans, and for use on on-the-highway light trucks.
Tires covered by these investigations may be tube-type, tubeless, radial, or non-radial,
and they may be intended for sale to original equipment manufacturers or the
replacement market.
Subject tires have, at the time of importation, the symbol "DOT" on the sidewall,
certifying that the tire conforms to applicable motor vehicle safety standards. Subject
tires may also have the following prefixes or suffix in their tire size designation, which
also appears on the sidewall of the tire:
Prefix designations:
30 1d. at 3 and 30.
31 Proclama tion 841 4 of September 1 1 , 2009, To Address Market Disruption From Imports of
Certain Passenger Vehicle and Light Truck Tires From the People ' s Republic of China , 74 Fed.
Reg. 47,861 (Sept. 17, 2009).
P Identifies a car intended primarily for service on passenger cars;
LT Identifies a tire intended primarily for service on light trucks
Suffix letter designations:
LT Identifies light truck tires for service on trucks, buses, trailers, and
multipurpose passenger vehicles used in nominal highway service.
All tires with a "P" or "LT" prefix, and all tires with an "LT" suffix, in their size
designations are covered by these petitions regardless of their intended use.
In addition, the lack of such prefix or suffix designations in a tire' s size
designation does not indicate that the tire is outside of the scope of these petitions, as
there are many tire size designations that lack such prefixes and suffixes that are
nonetheless passenger vehicle and light truck tires. A full list of the tire size designations
that indicate the tire is a subject passenger vehicle or light truck tire is published in
the Tire and Rim Association Year Book and updated annually. A copy of these sections
from the 2014 edition of the Tire and Rim Association Year Book is attached at Exhibit
1-6. Any tire of any size designation listed in the passenger car section or light truck
section of the Tire and Rim Association Year Book, as updated annually, is covered by
the scope of these petitions, regardless of the tire' s intended use, limited only by the
specific exceptions set out below.
Specifically excluded from the scope of these investigations are the following
types of tires: (1) racing car tires, defined as tires with a "ZR" appearing in the size
designation; (2) new pneumatic tires, of rubber, of a size designation not listed in the
passenger car section or light truck section of the Tire and Rim Association Yearbook;
(3) pneumatic tir es , of r ubber , that ar e not new, including r ecycled and r etr eaded tir es ;
and (4) non-pneumatic tir es , s uch as s olid r ubber tir es .
The pr oducts cover ed by the petitions ar e cur r ently clas s ified under the following
HTSUS s ubheadings : 4011. 10. 10, 4011. 10. 50, 4011. 20. 10. 05, and 4011. 20. 50. 10. For
eas e of r efer ence, we attached at Exhibit 1-7 the r elevant excer pts fr om the 2014 edition
of the Har monized Tar iff Schedule. While HTSUS s ubheadings ar e pr ovided for
convenience and for cus toms pur pos es , the wr itten des cr iption of the s ubject mer chandis e
is dis pos itive. Petitioner notes that, dur ing the per iod of s afeguar d r elief, ther e wer e lar ge
incr eas es in impor ts under two bas ket categor ies for other tir es not els ewher e clas s ified:
4011. 99. 45 and 4011. 99. 85. 32 To the extent that tir es that meet the s cope des cr iption ar e
impor ted under thes e or other HTS categor ies not lis ted above, they ar e intended to be
cover ed.
The r eques ted s cope of inves tigations is attached at Exhibit 1-8.
F. Name of the Countr y of Manufactur e of Subject Mer chandis e (19
C. F. R. 351. 202(b)(6))
The name of the countr y in which s ubject mer chandis e is manufactur ed is the
People's Republic of China.
G. For eign Pr oducer s and Expor ter s (19 C. F. R. 351. 202(b)(7)(i)(A) and
MAD
The names and addr es s es of companies believed to s ell the s ubject mer chandis e at
les s than fair value, and believed to benefit fr om counter vailable s ubs idies , that expor t the
s ubject mer chandis e to the United States fr om China ar e pr ovided at Exhibit 1-9. The
pr opor tion of expor ts to the United States that each per s on accounted for in the mos t
32 Relevant impor t s tatis tics ar e pr ovided at page 1-53.
1-13
recent 12-month period is not publicly available to the petitioner. While there is s ome
volume reported in the Automated Manifes t Sys tem, a s ignificant portion of the volume
of exports enters as undis clos ed and thus is not identified with any individual foreign
producer or exporter.
In its China-s pecific s afeguard inves tigation, the Commis s ion determined that the
larges t Chines e producers of s ubject tires were: GITI Tire Inves tment Co., Ltd., Triangle
Group Co., Ltd., Hangzhou Zhongce Rubber Co., Ltd., Shandong Linglong Rubber Co.,
Ltd., Double Coin Holdings Co., Ltd., Aeolus Tyre Co., Ltd., Qingdao Doubles tar
Indus trial Co., Ltd., Qingdao Yellow Sea Rubber Co., Ltd., and Guangzhou Pearl River
Rubber Tyre Ltd.33
H. Factual Information Relevant to Dumping (19 C.F.R.
351.202(b)(7)(i)(B) and (C))
Factual information regarding U.S. prices of s ubject merchandis e is provided in
Volume ll of thes e petitions . The Department of Commerce has found China to be a
non-market economy. Factual information relevant to the calculation of normal value
under the Department's non-market economy methodology is als o provided in Volume II
of thes e petitions .
I. Subs idy Allegations and Supporting Factual Information (19 C.F.R.
351.202(b)(7)(ii)(B) and (C))
Subs idy allegations and s upporting factual information reas onably available to
petitioner to s upport thes e allegations are provided in Volume III of thes e petitions .
33 Tires 421 Inves tigation at IV- 1 IV-2.
I-14
J. Volume and Value of Imports (19 C.F.R. 351.202(b)(8))
The volume and value of the subject merchandise imported during the most recent
three-year period and other recent periods (2011 through March of 2014) is below.
Imports of PVLT Tires from China34
201 1 2012 201 3 Q1 21 03 Q1 2014
Customs
Value
$968 , 099, 8 64 $ 1 , 266, 068 , 467 $2, 077, 678, 896 $43 7, 749, 975 $5 1 0, 43 5 , 3 78
Number
of T
ir
es
24
'
566
'
03 3 3 1 , 484, 8 8 9 50, 832, 749 1 0, 269, 594 1 2, 793 , 1 05
K. Importers (19 C.F.R. 207.11(b)(2)(iii), 351.202(b)(9))
The names, addresses, and other reasonably available contact information for
companies that the petitioner believes import the subject merchandise are attached at
Exhibit I-10.
L. Pricing Products (19 C.F.R. 207.11(b)(2)(iv))
The petitioner requests the Commission seek pricing information on the following
products:
Product 1. Subject tires, tire size 205/55R16, 89-94 load index, any speed rating.
Product 2. Subject tires, tire size P215/55R17, 93-98 load index, any speed rating.
Product 3. Subject tires, tire size 225/60R16, 97-98 load index, any speed rating.
Product 4. Subject tires, tire size P235/75R15, 104-110 load index, any speed
rating.
Product 5. Subject tires, tire size LT245/75R16, 111-116 load index, any speed
rating.
Product 6. Subject tires, tire size LT265/75R16, 112-116 load index, any speed
rating.
34 USITC Trade DataWeb, U.S. Imports for Consumption, for HTS 4011.10.10, 4011.10.50,
4011.20.10.05, and 4011.20.50.10.
Publicly available information indicates these are among the most popular, and thus
highest volume, tire sizes in the U.S. market, including both the OEM and replacement
markets.35 Consistent with its prior practice, the Commission should seek prices on an
F.O.B. basis to unrelated customers.
M. Lost Sales and Revenues (19 C.F.R. 207.11(b)(2)(v))
The petitioner represents workers in the PVLT tires industry and thus is not in a
position to provide lost sales and revenue allegations. However, as explained in more
detail below, the domestic PVLT tires industry has lost shipments and market share as
imports of PVLT tires have increased and undersold domestic producers. Thus, the
petitioner has a reasonable basis to believe that significant lost sales and revenues have in
fact occurred during the three years preceding the filing of these petitions.
III. MATERIALINJURY AND THREAT OF MATERIALINJURY
This section provides information reasonably available to the petitioner indicating
that the domestic industry is suffering material injury, or threat of material injury, by
reason of subject PVLT tire imports from China.36 In a preliminary determination, the
Commission determines whether there is a "reasonable indication" that an industry in the
United States is materially injured, or threatened with material injury, by reason of
subject imports.37 The statute defines "material injury" as "harm which is not
inconsequential, immaterial, or unimportant."38 In making its injury determination, the
35 Information on popular tire sizes is attached at Exhibit I-11.
36 This section thus complies with the petition requirements set out at 19 C.F.R.
351.202(b)(10).
37 19 U.S.C. 1671b(a)(1); 1673b(a)(1).
38 19 U.S.C. 1677(7)(A).
1-16
Commission considers the volume of imports, their effect on prices of the domestic like
product, and their impact on producers of the domestic like product.39 While the statute
does not define "by reason of' the causal link that must exist between subject imports
and material injury the Commission determines that injury is by reason of subject
imports where subject imports are "more than a minimal or tangential cause of injury"
and where there is a sufficient causal (not merely temporal) nexus between subject
imports and material injury.
40
The Commission considers all relevant factors that bear on the state of the
domestic industry within the context of the business cycle and the industry's conditions
of competition; no single factor is dispositive in the Commission's determination.41
While the Commission must examine factors other than subject imports (such as changes
in demand and trends in non-subject imports) to ensure that it is not attributing injury
from these other factors to subject imports,42 the Commission need not isolate the injury
caused by subject imports from other factors, weigh the injury from subject imports
against the injury from other factors, or determine that subject imports are the principal
cause of injury the existence of injury caused by other factors does not, in and of itself,
require the Commission to make a negative injury determination.43
39 19 U.S.C. 1677(7)(B)(i).
4 U. S. International Trade Commission, Certain Aluminum Extrusionsfrom China, Inv. Nos.
701-TA-475 and 731-TA-1177 (Final), USITC Pub. 4229 (May 2011) at 15.
41 19 U.S.C. 1677(7)(C)(iii).
42 SAA, H.R. Rep. 103-316, Vol. I (1994) at 851-52; S. Rep. 96-249 at 75 (1979); H.R. Rep.
96-317 at 47 (1979).
43 U. S. International Trade Commission, Certain Aluminum Extrusionsfrom China, Inv. Nos.
701-TA-475 and 731-TA-1177 (Final), USITC Pub. 4229 (May 2011) at 16.
I-17
This section is organized as follows. Section 'ILA provides information
demonstrating that imported PVLT tires from China are not negligible. Section III.B
describes the conditions of competition in the market for PVLT tires. Section III.0
provides information on the volume of subject imports, and section IILD provides
information on the price effects of subject imports. Section TILE contains evidence that
subject imports are having significant adverse effects on the domestic industry. Section
IMF addresses the threat of material injury by reason of subject imports.
A. Negligibility
Imports from a country are considered negligible if they account for less than
three percent of the volume of all merchandise imported into the United States during the
most recent 12-month period for which data is available immediately preceding the filing
of the petition. 4 4 The most recent 12-month period for which import data is currently
available as of the filing of these petitions is the period of April 2013 through March
2014 . That data is attached at Exhibit 1-12. Imports from China accounted for 31.4 1
percent of U.S. PVLT tire import volume during the period, and thus they were not
negligible.
B. Conditions of Competition
1. Demand
Demand for PVLT tires by OEM producers depends on the number of new
vehicles and light trucks produced in the United States.4 5 Demand in the replacement
market depends on the number of vehicles and light trucks that need replacement tires,
which will depend on the number of vehicles and light trucks on the road, miles driven,
4 4 19 U.S.C. 1677(24 )(A)(i).
4 5 Tires 4 21 Investigation at V-9.
I-18
and economic conditions that influence consumers' decisions as to when to purchase
replacement tires. 4 6
U. S. vehicle and light truck production rose in 2012 and 2013, for a total increase
of more than 25 percent from 8. 7 million units in 2011 to 10. 9 million units in 2013. 4 7
As the number of vehicles produced rose, so did the number of tires shipped to the OEM
market. Tires shipped to the replacement market dipped in 2012, but they rose in 2013
and were higher than they had been in 2011. Total shipment data for passenger vehicle
and light truck tires from two publicly available sources are below. These include
shipments of domestically-produced tires as well as imports. Both data sources show a
total increase in apparent consumption of about 5 percent from 2011 to 2013. Industry
sources predict that demand will only grow by about 4 . 2 million tires, or one percent, in
2014 . 4 8
Total Tires Shipped in the U. S. , All Sources
Millions of tires
RMA data4 9 2011 2012 2013 %Ch ange
2. 4 % PVReplacement 1 94 . 4 1 90. 9 1 99. 1
PVOEM 3 5 . 7 4 0 4 3 . 6 22. 1 %
LT Replacement 28 . 6 28 . 1 . 28 . 4 -0. 7 %
LT OEM 4 . 2 4 . 3 4 . 4 4 . 8 %
Total 26 2. 9 26 3 . 3 27 5 . 5 4 . 8 %
4 6 m
4 7 Sean McAlinden and Yen Chen, "CAR's U. S. Vehicle Sales, Production, & Employment
Outlook First Quarter January 2014 ," Center for Automotive Research, attached at Exhibit I-
13.
4 8 Bob Ulrich, "The signposts up ahead? Tire sales," Modern Tire Dealer (Jan. 2014 ) at 30,
attached at Exhibit 1-14 .
4 9 Attached at Exhibit 1-15.
I-19
MTDdata5 201 1 201 2 201 3 %Change
2. 6% PVRepl acement 1 96. 5 1 92 201 . 6
PVOEM 36 40. 5 44 22. 2%
LTRepl acement 28 . 6 28 . 3 28 . 3 - 1 . 0%
LTOEM 4. 1 4. 2 4. 4
7. 3%
Tot al 265 . 2 265 278 . 3 4. 9%
2. Suppl y
The Commission previousl yfound that domestic producers of PVLTtires have
the abil ityto respond to changes in demand with moderate changes in the quantityof
shipments, based on avail abl e excess capacityand some abil ityto produce al ternate
products; though suppl yresponsiveness was found to be somewhat constrained bythe
domestic industry's l imited abil ityto shift fromal ternate markets and somewhat l imited
inventories. 51 Based on publ icl yavail abl e information, it appears that U. S. tire producers
woul d continue to have a moderate if not higher degree of suppl yresponsiveness today.
As detail ed bel ow, domestic shipments have fal l en significantl ysince 2011 due to
displ acement byChinese imports, indicating that there is significant excess capacityand
potential l ysignificant inventories, both of which woul d support a finding of a moderate
or greater suppl yresponsiveness.
The Commission has al so previousl yfound that Chinese producers of PVLTtires
have the abil ityto respond to changes in demand with moderate changes in the quantity
of shipments, based on avail abl e excess capacity, some abil ityto produce al ternate
products, and the abil ityto divert shipments. 52 However, the Commission found that the
5 Att ached at Exhibit 1- 16.
5 1 Tires 421 Investigationat V- 7.
5 2 1d. at V- 8 .
1- 20
Chinese industry's supply responsiveness was somewhat limited by reportedly low
inventories.53
The trend in imports from China since 2011 demonstrates that Chinese producers
have the ability to respond to changes in demand with large, not just moderate, changes
in supply.
Imports of PVLT Tires from China54
201 1 2012 2013 Q1 2103 Q1 2014
Customs
Value
$968 , 099, 8 64 $ 1 , 266, 068 , 467 $2, 077, 678, 896 $43 7, 749, 975 $5 1 0, 43 5 , 3 78
Number
of T
ir
es
24
'
566
'
03 3 3 1 , 484, 8 8 9 50, 8 3 2, 749 1 0, 269, 5 94 1 2, 793 , 1 05
From 2011 to 2012, annual U.S. imports of PVLT tires from China rose rapidly,
increasing by nearly 7 million tires, or 28 percent. The increase accelerated sharply after
the safeguard relief expired in September of 2012. In 2013, annual imports jumped by
another 19 million tires, or 61.5 percent. As a result, in the space of just three years from
2011 to 2013, Chinese producers more than doubled their annual exports of PVLT tires to
the United States. The rapid increase has continued in 2014, with first quarter imports up
by 2.5 million tires, or 25 percent, compared to the first quarter of 2013. The supply
from China is thus significant and rising rapidly.
3. Substitutability
The Commission has previously determined that U.S. and Chinese PVLT tires are
highly substitutable.55 As explained in more detail below, that continues to be the case
today.
53 Id.
54 USITC Trade DataWeb, U.S. Imports for Consumption, for HTS 4011.10.10, 4011.10.50,
4011.20.10.05, and 4011.20.50.10.
1-21
Domestic and imported Chinese PVLT tires have the same physical
characteristics and uses. The Commission has explained that domestic and Chinese
PVLT tires are produced from the same basic raw materials and have the same basic
components.56 The Commission also found that domestic and Chinese tires are
"substantially identical in inherent or intrinsic characteristics" and have the same basic
function."
Both domestic and imported Chinese PVLT tires are subject to the same motor
vehicle safety, performance, and marking standards promulgated by the U.S. Department
of Transportation. 58 In addition, domestic and Chinese tires must meet the same Uniform
Tire Quality Grade Standards ("UTQGS"), which are established by the National
Highway Traffic Safety Administation.59 The grades provide consumers with
information on the tread wear, traction, and temperature capabilities of tires, with each
tire graded on all three factors. A copy of the most recent UTQGS ratings, attached at
Exhibit 1-18 , shows that both brands made in the U.S., such as Goodyear and
Bridgestone, and brands made in China, such as GT Radial (made by GITI Tire) and
Triangle (made by the Triangle Group), are offered in a wide range of overlapping grades
on all three factors.
55 Tires 421 Investigation at 23 and V-12.
56 Id. at 8 .
571d. at 9 and 1-4.
58 See NHTSA, "Importation and Certification Facts," attached at Exhibit 1-17. See also 49
C.F.R. 571.119.
59 49 C.F.R. 575.104.
1-22
In addition, as the table below shows, for some of the most popular replacement
tire size ranges, both domestic and Chinese tires are available in overlapping load speed
ranges, treadwear grades, traction grades, and temperature grades.
Physical Characteristics of Chinese and Domestic Tires in Popular Sizes6
Si z e Ori gi n
Loa d S pe e d
Tre a d we a r
Gra de s
Tra ct i o n Gra d e s
Te mpe ra t ure
Gra d e s
Lowe st Hi g h e st Lowe s t Hi g h e st Lowe s t Hi g h e st Lowe s t Hi g h e s t
205/55R16 Ch i na 911 91V 340 640 A AA B A
U. S . 89H 91Y 40 820 B AA B A
P 235/75R15 Ch i n a 105S 109T 500 700 A A B B
U. S . 1055 108T 300 800 A A B A
225/6 0R16 Ch i n a 98H 98H 400 400 A A A A
U. S . 981 98V 400 800 A A B A
215/60R16 Ch i n a 95T 95V 400 640 A A B A
U. S . 94V 95V 260 820 A A B A
P215/60R16 Ch i n a 941 951 640 760 A A B B
U. S . 945 94V 340 800 B A B A
P26 5/70R17 Ch i n a 1135 113S 500 500 A A B B
U. S . 113S 1 13T 340 800 B A B A
195/6 5R15 Ch i n a 91T 91H 400 480 A A A A
U. S . 91T 95H 400 740 A A B A
195/60R15 Ch i na 88H 88H 400 400 A A A A
U. S . 87S 88V 260 740 A AA B A
Thus, both domestic and Chinese PVLT tires are available in a range of sizes
and with various designs and features (longer or shorter tread wear, better road grip or
handling, etc.) . Indeed, as the examples in Exhibit 1-19 show, in some cases the exact
same tire, made by the same company, and marketed under the same brand, is advertised
as being produced in both China and the United States.
Given this high degree of physical similarity along a continuous range of tire sizes
and types, consumers and producers perceive U.S. and Chinese tires as being highly
6 Copies of the advertising materials for these tires are attached at Exhibit 1-2.
1-23
interchangeable. In the China-specific safeguard investigation on PVLT tires, a majority
of producers, importers, and purchasers stated that domestic and Chinese tires were
"always" used interchangeably, while at least 80 percent reported they were either
"always" or "frequently" used interchangeably.6I
When these interchangeable tires compete in the marketplace, they compete on
price. While most purchasers reported that quality was the top factor in their purchasing
decisions for PVLT tires, price was the second most-frequently cited top factor and by far
the most frequently cited second most important factor.62 Moreover, 93 percent of
purchasers reported that Chinese and U.S. tires were comparable in terms of meeting
industry quality standards, 86 percent reported they were comparable in terms of
exceeding industry quality standards, and 71 percent reported they were comparable in
product consistency.63 Thus, when choosing between tires of comparable quality,
purchasing decisions come down to price. In the China-specific safeguard investigation,
25 out of 31 purchasers reported that price was a "very important" factor in their
purchasing decisions.64
U.S. and Chinese PVLT tires compete head-to-head on price and are sold through
the same channels of distribution. In the China-specific safeguard investigation, the
Commission found that both domestic and Chinese PVLT tires were primarily sold to
warehousing distributors, who in turn sell to consuming contractors or end users.65 In
2008, 82.3 percent of domestically produced tires were sold to the replacement market
61 Tires 42 1 Investigation at V-15.
621d at Table V-4.
63 Id. at Table V-8.
64 Id. at Table V-5.
65 Id. at 9.
1-24
and 17.7 percent were sold to original equipment manufacturers.66 These tires
overlapped with imports from China, 95 percent of which were sold into the replacement
market and 5 percent of which were sold to original equipment manufacturers.67
While the Commission has previously found that there is evidence of three "tiers"
in the domestic tire market based on brand and price, it rejected arguments that
competition between U.S. and Chinese tires was attenuated by these tiers. While tires
vary in size depending on the vehicle or light truck onto which they will be mounted, and
while tires may have various design features, the Commission has found that there are no
clear dividing lines between sizes or types of PVLT tires.68 The Commission found that
"both domestic producers and importers ship a relatively full range of passenger vehicle
and light truck tires."69 In addition, the Commission found that there was no clear
dividing line between the alleged "tiers" in the market." Indeed, there was not even any
consensus among producers and purchasers regarding how to define each tier and what
types of tires fell into which tiers.71
Moreover, even if such "tiers" did ex ist, the Commission found that shipments of
both domestically produced and imported Chinese tires fell into each of the three alleged
"tiers."72 Direct head-to-head competition between U.S. and Chinese tires throughout the
domestic market continues to be the case today.
66 Id. at Table V-2.
671d
68 id. at 9 n.4 1.
69 Id. at 8 .
70 1d. at 27.
71 Id.
72 Id.
1-25
U.S. and Chinese t ir es cont inue t o be sold side-by-side fr om t he same supplier s t o
t he same cust omer s. A r anking of t he t op 25 commer cial t ir e dealer s in 2013 list s a
var iet y of br ands being sold t hr ough each, including in many cases bot h br ands made in
t he U.S. and br ands made in China.73 Tir es made in China and mar ket ed t hr ough t hese
dealer s include Aeolus and Double Coin. As shown in Exhibit 1-2, for t he most popular
r eplacement t ir e sizes, one sit e t hat per mit s consumer s t o det er mine t he or igin of t he t ir e
offer s bot h U.S. and Chinese t ir es side by side, confir ming t heir head-t o-head
compet it ion. Anot her lar ge t ir e dist r ibut or , Del-Nat , st at es t hat it sells t ir es made bot h in
t he U.S. and over seas under it s pr ivat e label, and it list s manufact ur ing codes for bot h
U.S. pr oducer s (Cooper , Yokohama) and Chinese pr oducer s (CMA and GTC) in it s t ir e
cat alog.74
U.S. and Chinese t ir es also st ill compet e head-t o-head in t he OEM mar ket .
At t ached at Exhibit 1-10 is t he list of known impor t er s of PVLT t ir es fr om China. A
number of vehicle and light t r uck OEMs, including Chr ysler , Gener al Mot or s, Hyundai,
Nissan, and Volkswagen, have dir ect ly impor t ed t ir es fr om China since 2011.
In addit ion, Chinese and U.S. t ir es ar e pr esent in t hese same channels of
dist r ibut ion t hr oughout t he count r y, and bot h ser ve a nat ional mar ket . As t he impor t dat a
at t ached at Exhibit 1-22 shows, subject impor t s fr om China ent er ed t hr ough 38 differ ent
por t dist r ict s in 2013, including dist r ict s in t he Nor t heast , Midwest , Sout heast , Cent r al
Sout hwest , Mount ains, and Pacific Coast .
Finally, PVLT t ir es ar e offer ed along a cont inuum of pr ices. While lar ger t ir es
may in gener al be mor e expensive t han smaller t ir es due t o t he addit ional mat er ials
73 The list is at t ached at Exhibit 1-20.
74 Excer pt s fr om Del-Nat 's websit e ar e at t ached at Exhibit 1-21.
1-26
needed to produce the ti re, and ti res wi th di fferent features may be pri ced di fferently,
there are no clear di vi di ng li nes bas ed on pri ce. As the data below s how, ti res of the
s ame type and s i ze from both Chi na and the U.S. are avai lable i n a range of pri ces ,
further demons trati ng a lack of market s egmentati on bas ed on pri ce. Whi le Chi nes e
pri ces are lower on average due to aggres s i ve unders elli ng, both Chi nes e and U.S. ti res
are avai lable at a range of pri ce poi nts .
Pri ce Ranges for Chi nes e and Domes ti c Ti res i n Popular Si zes 75
2051 5 5 R1 6 P21 5/ 60R1 6
U. S . Chi na U. S . Chi na
$ 1 8 8 . 00
$ 1 5 7 . 00
$ 1 47 . 00 $ 1 5 2. 00
$ 1 42. 00 $ 1 5 0. 00
$ 1 3 5 . 00 $ 1 28 . 00
$ 1 3 1 . 00 $ 1 1 7 . 00
$ 1 27 . 00 $ 1 1 0. 00
$ 1 25 . 00 $ 1 09. 00
$ 1 20. 00 $ 1 09. 00
$ 1 1 1 . 00 $ 1 03 . 00
$ 1 01 . 00 $97 . 00
$91 . 00 $95 . 00
$8 9. 00 $93 . 00
$8 7 . 00 $93 . 00
$8 6. 00 $91 . 00
$8 5 . 00 $90. 00
$84. 00 $8 9. 00 $8 9. 00
$7 9. 00 $8 6. 00
$74. 00 $8 3 . 00
$69. 00 $7 3 . 00
$5 9. 00 $5 9. 00
For all of thes e reas ons , domes ti c and Chi nes e PVLT ti res conti nue to be hi ghly
s ubs ti tutable and they conti nue to compete head-to-head acros s the enti re domes ti c
75 Copi es of the adverti s i ng materi als for thes e ti res are attached at Exhi bi t 1 -2.
1 -27
market for PVLT ti res . Due to thi s hi gh degree of s ubs ti tutabi li ty, that competi ti on i s
bas ed largely on pri ce.
C. Volume of Subject Imports
The volume of s ubject i mports from Chi na i s s i gni fi cant. From 2011 to 2013, the
U. S. i mported nearly 25 to 51 mi lli on PVLT ti res a year from Chi na, valued from $968
mi lli on to over $2 bi lli on a year. Chi na exported more ti res to the U. S. than any other
country throughout the peri od, and by 2013 i t exported more than twi ce as many ti res as
the next larges t s ource.
7 6

Imports of PVLT Ti res from Chi na and the Res t of the World7 7
Cus toms
Value,
$mn
201 1 2012 2013 Q1 20 13 Q1 2014
Chi na $968 $ 1 , 266 $2, 07 8 $43 8 $5 1 0
Oth er $7 , 440 $7 , 932 $7 , 65 8 $ 1 , 86 1 $ 1 , 7 7 8
Worl d $8, 408 $9, 1 98 $9, 7 36 $2, 298 $2, 288
Chi na % 1 1 . 5 1 % 1 3 . 7 6% 2 1 . 34% 1 9. 05 % 22. 3 1 %
Numb er
of Tires
201 1 2012 2013 Q1 2103 Q1 2014
Chi na 24, 5 66, 033 3 1 , 484, 889 5 0, 832, 7 49 1 0, 269, 5 94 1 2, 7 93, 1 05
Other 1 1 5 , 043, 3 5 5 1 1 5 , 290, 939 1 1 5 , 95 9, 945 27 , 609, 3 82 28, 1 8 1 , 5 04
Worl d 1 39, 609, 3 88 1 46, 7 7 5 , 828 1 66, 7 92, 694 37 , 87 8, 97 6 40, 97 4, 609
Chi na % 1 7 . 60% 21 . 45 % 3 0. 48% 27 . 1 1 % 3 1 . 22%
The volume of s ubject i mports als o i ncreas ed s ubs tanti ally from 2011 to 2013,
whether vi ewed by volume or value. By value, annual U. S. i mports of PVLT ti res from
Chi na ros e by $298 mi lli on, or 31 percent, from 2011 to 2012. The rate of i ncreas e more
than doubled i n 2013, after the s afeguard duti es on PVLT ti res from Chi na expi red i n
7 6 Though Chi na was the top s ource by volume i n all three years , i t was not the top s ource by
value unti l 2013.
7 7 USITC Trade DataWeb, U. S. Imports for Cons umpti on, for HTS 4011. 10. 10, 4011. 10. 50,
4011. 20. 10. 05, and 4011. 20. 50. 10. Values may not add due to roundi ng.
I-28
September of 2012. In 2013, annual imports leapt by $812 million, or 64 percent. As a
result, in the space of j ust three years from 2011 to 2013, Chinese producers more than
doubled the value of their annual exports of PVLT tires to the United States. The rapid
increase has continued in 2014, with first quarter imports up by $73 million, or 16.6
percent, compared to the first quarter of 2013.
In terms of volume, annual U.S. imports of PVLT tires from China rose by nearly
7 million tires, or 28 percent, from 2011 to 2012. Imports increased even more rapidly in
2013, after the safeguard duties on imports of PVLT tires expired. In 2013, annual
imports j umped by another 19 million tires, or 61.5 percent. As a result, Chinese
producers more than doubled their annual exports of PVLT tires to the United States from
2011 to 2013. The rapid increase has continued in 2014, with first quarter imports up by
2.5 million tires, or 24.6 percent, compared to the first quarter of 2013.
China also accounted for a growing share of U.S. imports over the period.
Imports from China reached 21.3 percent of all imports by value and 30.5 percent by
volume in 2013; nearly twice China's import market share in 2011. Imports from China
continued to grow in the first quarter of 2014, hitting 22.3 percent of imports by value
and 31.2 percent by volume.
Imports of PVLT tires have also increased relative to domestic production and
relative to domestic consumption. The tables below derive estimated domestic shipments
by subtracting import volume from reports of total shipments in the U.S. market from all
sources, i. e. , apparent consumption, from two industry sources.
Volume of Imports and Domestic Shipments, based on RMAData78
Million Tires 201 1 201 2 201 3
Total Consumption 262. 9 263. 3 275 . 5
China Imports 24. 5 7 3 1 . 48 5 0. 83
Non- Subj ect Imports 1 1 5 . 04 1 1 5 . 29 1 1 5 . 96
Domestic Shipments 1 23. 29 1 1 6. 53 1 08 . 7 1
Market Share 201 1 201 2 201 3
China Imports 9. 35% 1 1 . 96% 1 8 . 45%
Non- Subj ect Imports 43. 76% 43. 79% 42. 09%
Domestic Shipments 46. 90% 44. 26% 39. 46%
China %Dom. Ship 1 9. 93% 27 . 0 1 % 46. 76%
Volume of Imports and Domestic Shipments, based on MTD Data79
Million Tires 201 1 201 2 201 3
Total Consumption 265 . 20 265 . 00 278 . 30
China Imports 24. 5 7 3 1 . 48 5 0. 8 3
Non- Subj ect Imports 1 1 5 . 04 1 1 5 . 29 1 1 5 . 96
Domestic Shipments 1 25 . 59 1 1 8 . 22 1 1 1 . 5 1
Market Share 201 1 201 2 201 3
China Imports 9 . 26% 1 1 . 8 8% 1 8 . 27%
Non- Subj ect Imports 43. 38% 43. 5 1 % 41 . 67%
Domestic Shipments 47. 36% 44. 6 1 % 40. 07%
China %Dom. Ship 1 9. 5 6% 26. 63% 45 . 5 9%
As imports of PVLTtires from China grew each year, they steadily gained market
share entirely at the expense of U. S. producers. From 2011 to 2013, China increased its
annual exports to the U. S. by more than 26 million tires, while domestic producers'
78 RMA consumption data is in Exhibit 1- 15. Chinese and non- subj ect imports are from
USITC Trade DataWeb, U. S. Imports for Consumption, for HTS 4011. 10. 10, 4011. 10. 50,
4011. 20. 10. 05, and 4011. 20. 50. 10. Domestic shipments are the difference between consumption
and imports.
79 MTD consumption data is in Exhibit 1- 16. Chinese and non- subj ect imports are from
USITC Trade DataWeb, U. S. Imports for Consumption, for HTS 4011. 10. 10, 4011. 10. 50,
4011. 20. 10. 05, and 4011. 20. 50. 10. Domestic shipments are the difference between consumption
and imports.
1- 30
shipments f el l by more than 14 mil l ion tires. Non-subject imports remained essential l y
f l at. As a resul t, imports f rom China doubl ed their share of the U. S. market, growing
f rom 9 to 18 percent of apparent consumption f rom 2011 to 2013. At the same time, U. S.
producers steadil y l ost market share, shrinking f rom 47 to 40 percent of the market.
Thus, whil e China gained nine percentage points of market share, domestic producers l ost
seven percentage points of market share.
Imports f rom China al so increased rel ative to domestic shipments. Whil e U. S.
producers shipped about f ive tires f or each tire shipped by China in 2011, that ratio f el l to
about 3. 7 tires in 2012, and it f el l again to barel y over two U. S. tires f or each tire f rom
China in 2013. In short, the ratio of Chinese to domestic tires more than doubl ed as
imports f rom China surged and domestic shipments f el l .
Total consumption data does not appear to be publ icl y avail abl e f or the f irst
quarter of 2014. However, industry sources predict that demand f or PVLT tires wil l onl y
increase by 4. 2 mil l ion tires, or 1. 5 percent, in 2014 compared to
2013. 80
Meanwhil e,
imports f rom China have al ready grown by 24. 6 percent in the f irst quarter of 2014
compared to the f irst quarter of 2013. Thus, imports f rom China are l ikel y growing
sixteen times more rapidl y than demand, meaning China is continuing to gain more
market share at the expense of domestic producers in 2014.
In sum, whether viewed by vol ume or val ue, and whether on an absol ute or
rel ative basis, the data support a f mding that the vol ume of subject imports f rom China is
signif icant. In a f l at to sl ow-growing U. S. market, Chinese imports increased
signif icantl y each year, permitting China to doubl e its imports and market share f rom
8 Bob Ul rich, "The signposts up ahead? Tire sal es," Modern Tire Deal er (Jan. 2014) at 30,
attached at Exhibit 1-14.
1-31
2011 to 2013. That growth continues in 2014. Subject tires took this market share
directly from domestic producers, as each lost domestic shipment and lost percentage
point of domestic market share corresponded with an even larger gain by Chinese
imports.
D. Price Effects of Subject Imports
In evaluating the price effects of subject imports, the statute directs the
Commission to consider whether: 1) there has been significant price underselling by the
imported merchandise; and 2) the effect of imports of such merchandise otherwise
depresses prices to a significant degree or prevents price increases, which otherwise
would have occurred, to a significant degree.8I
As explained in more detail above, PVLT tires from the U.S. and China are highly
substitutable, and they compete primarily on price across the U.S. market. Publicly
available information indicates that the growing tide of imports from China has had, and
is having, significant adverse price effects on the domestic PVLT tire industry.
In the China-specific safeguard investigation, the Commission found "nearly
universal underselling" by Chinese tires. 82 Indeed, the Commission found underselling
in 119 of the 120 instances where prices could be compared, and the average margin of
underselling was 18.9 percent.83 In 2012, industry sources began to cite concerns that
aggressive underselling and price depression would worsen once the safeguard duties on
PVLT tires from China expired in September of 2012. Since the expiration of the duties,
prices for tires have fallen across the board as more Chinese tires have entered the U.S.
81 19 U.S.C. 1677(7)(C)(ii).
82 Tires 421 Investigation at 23.
83 Id. at V-35.
1-32
market and domestic producers have been forced to also lower their prices in order to
compete.
In its 2012 Annual Report, Hankook tire, a Korean-based company, noted its
concern that, "the race for market dominance is forecast to intensify due to
such issues as the abolition by the US government of protective trade practices
against goods made in China
.../ ) 8 4
In December of 2012, three months after the safeguard duties expired, a tire
dealer industry publication reported that the expiration of the safeguard duties
led to price concessions from manufacturers to dealers, and this "has
significantly lowered the cost of tires in the value segment in some cases by
as much as 18 %." 8 5

The report further explained that expiration of the duties (along with lower
raw materials costs) "has reduced the cost of tires to dealers as these factors
have seemingly caused manufacturers to become more aggressive with price
.... dealers reported that the average cost of a value tire dropped
approximately 10% in October."8 '
Prices for tires in the U.S. market continued to fall in the spring of 2013. A
majority of tire dealers reported more competitive pricing from their suppliers
in March of 2013, with prices dropping both for premium brands and in the
"value spectrum." 8 7
A majority of tire dealers continued to characterize manufacturer pricing as
aggressive in July of 2013, as prices for top-selling branded tires and "opening
price point tires" continued to fall. 8 8
An article examining the first year of import data after the removal of the
tariffs explained: "The removal of the tariffs also put downward pressure on
pricing in the passenger/ light truck end of the market."8 9
8 4 Hankook 2012 Annual Report at 4 9, attached at Exhibit 1-23.
8 5 j0
Healy and Nick Mitchell, "Dealers remain cautious about operating trends going
forward," Modern Tire Dealer (Dec. 18 , 2012) , attached at Exhibit 1-24 .
8 61d
8 7 j0
Healy and Nick Mitchell, "Service sales are seen as bright spot in an otherwise soft
market," Modern Tire Dealer (May 21, 2013) , attached at Exhibit 1-25 .
8 8
Id.
8 9 "Editorial: Tariffs hampered U.S. passenger, LT production," RubberNews. com (Apr. 7 ,
2014 ) , attached at Exhibit 1-26.
1-33
In November of 2013, the President of Yokohama, a domestic producer, stated
that the expiration of the safeguard duties was a long-term concern for the
company. He stated: "Chinese brands are coming into the U.S. market and the
price level is coming down. Cheap tires are coming in and the Tier Two and
Tier Three brands are reducing their prices to compete with the Chinese
product. Then the Tier Two and Tier One have to adjust also.""
At the end of 2013, domestic tire manufacturers interviewed by an industry
publication "tend to agree that 2013 ended up being a difficult year for the
industry, most notably because of the adjustments that had to be made with
the removal of tariffs on Chinese-made passenger and light truck tires and
low-price product coming in."91
According to a foreign producer that exports to the U.S., those producers that
did reduce prices to maintain volume in the face of rising Chinese imports did
so "at a cost and that cost was price and profit .... Expectation of price levels
and profit, even though we knew it was going to drop, it was even more
severe than expectations for 2013.92
One domestic producer, Yokohama, noted its expectations that in 2014 there
would be "increased competition." The Yokohama representative noted:
"There are many low-cost imports, which are impacting everyone in the
market."93
An April 2014 article based on an interview with the president of tire distributor
Del-Nat emphasized how broadly increase Chinese imports had affected the market:
The best advantage Chinese-made tires have to offer is still
price ... with that advantage comes the ability to impact the
market as a whole through price fluctuation. Following the
expiration of the elevated tariffs on Chinese-made
consumer tires in September 2012, prices of Chinese tires
decrease substantially, contributing along with reduced
raw material prices to devaluation on tires across the
board."
9 Bob Bissler, "Yokohama plants roots in U.S. s oil, " Modern Tire Dealer (Nov. 4, 2013),
attached at Exhibit 1-27.
91 Jennifer Karpus, "Tire makers are optimistic despite economic concerns,"
RubberNews. com (Jan. 30, 2014), attached at Exhibit 1-28.
9 2 Id.
93 m
" William Schertz, "Del-Nat expanding its Chinese tire offerings," TireBusiness. com (Apr.
28, 2014), attached at Exhibit 1-29.
1-34
The president of Del-Nat explained: "... other manufacturers had to adjust their pricing.
The pricing on the Chinese tires is certainly a strong factor in the market ...."95
Publicly available price data further indicate that there is widespread underselling
by Chinese PVLT tires. As noted above, Commission found "nearly universal"
underselling by Chinese tires in the China-specific safeguard investigation. While the
Commission reviews wholesale, F.O.B. prices to unrelated parties in its investigations,
these prices are not publicly available to the petitioner. However, an analysis of publicly
available retail tire prices for some of the most popular replacement tire sizes reveals that
such massive underselling likely continues, with margins of underselling ranging from
11.90 percent to 40.28 percent, depending on the tire size. These prices are for tires
identified by the advertiser as having China or the U.S. as a country of origin.
Underselling by Chinese PVLT Tires96
Pas s enger Vehicle Tires
Size
Average
Chines e
Price
Average
U. S. Price
Underselling
Margin
205 / 5 5 R1 6 $9 3 . 80 $ 1 06. 47 - 1 1 . 9 0%
P23 5 / 75 R1 5 $9 1 . 5 0 $ 1 1 0. 3 0 - 1 7. 04%
225 / 60R1 6 $65 . 00 $ 1 01 . 2 1 -3 5 . 78%
2 1 5 160R1 6 $6 8. 00 $ 1 05 . 22 -3 5 . 3 7%
P2 1 5 / 60R1 6 $86 . 3 3 $ 1 06 . 1 3 - 1 8. 65 %
P26 5 / 70R1 7 $ 1 29 . 00 $ 1 5 5 . 23 - 1 6 . 9 0%
1 9 5 / 65 R1 5 $5 3 . 5 0 $84. 00 -3 6 . 3 1 %
1 9 5 160R1 5 $49 . 00 $82. 06 -40. 28%
95
96 The advertisements that are the sources for these prices are attached at Exhibit 1-2. The
prices are for tires that are advertised as being available at a certain price either with a U.S. or
Chinese origin. In cases where the same tire is advertised as being available at the same price
from both the U.S. and China, the price of the tire is included as an observation for both
countries.
1-35
Li ght TruckTi res
Si ze
Average
Chi nes e
Pri ce
Average
U. S. Pri ce
Unders elli ng
Margi n
LT245/ 75R1 6 $ 1 3 8 . 00 $ 1 8 6. 8 5 - 26. 1 4%
LT2651 75R1 6 $ 1 48 . 67 $ 1 90. 03 - 21 . 77%
LT23 5/ 8 5R1 6 $ 1 26. 50 $ 1 78 . 90 - 29. 29%
LT225/ 75R1 6 $ 1 28 . 50 $ 1 67. 53 - 23 . 3 0%
3 1 x1 0. 50R1 5 $ 1 1 9. 00 $ 1 59. 8 8 - 25. 57%
LT21 5/ 8 5R1 6 $ 1 1 9. 00 $ 1 8 5 . 77 - 3 5. 94%
LT245/ 75R1 7 $ 1 61 . 00 $ 1 95. 42 - 1 7. 61 %
LT28 5/ 70R1 7 $ 1 8 7. 00 $242. 63 - 22. 93 %
Underselli ng i s also apparent i n the retai l pri ces adverti sed for ti res wi th brands
closely associ ated wi th ei ther U. S. or Chi nese producers. Whi le some of the ti res wi th
these brands may also be produced i n other countri es, the countri es of ori gi n of the ti res
are not publi cly avai lable. The compari sons provi de further i ndi cati on of underselli ng by
Chi nese i mports.
Underselli ng by Chi nese PVLTTi re Brands97
Pas s enger Vehi cle Ti res
Si ze
Average
Chi nes e
Pri ce
Average
U. S. Pri ce
Unders elli ng
Margi n
205/ 55R1 6 $48 . 99 $8 6. 99 - 43 . 68 %
P23 5/ 75R1 5 $8 6. 49 $ 1 02. 99 - 1 6. 02%
P225/ 60R1 6 $60. 49 $ 1 02. 60 - 41 . 04%
P21 5/ 60R1 6 $6 1 . 99 $96. 3 9 - 3 5 . 69%
P265/ 70R1 7 $ 1 29. 00 $ 1 52. 8 0 - 1 5. 58 %
97 The adverti sements that are the sources for these pri ces are attached at Exhi bi t 1 - 30.
1 - 36
Li ght TruckTi res
Si ze
Average
Chi nes e
Pri ce
Average
U. S. Pri ce
Unders el l i ng
Margi n
LT245/ 75R1 6 $ 1 3 8 . 00 $ 1 8 0. 79 - 23 . 67%
LT265/ 75R1 6 $ 1 26. 99 $ 1 57. 99 - 1 9. 62%
LT265/ 70R1 7 $ 1 3 6. 49 $21 6. 3 7 - 3 6. 92%
LT23 5/ 8 5R1 6 $ 1 1 0. 3 2 $ 1 84. 62 - 40. 24%
LT225/ 75R1 6 $95. 49 $ 1 71 . 49 - 44. 3 2%
LT28 5/ 75R1 6 $ 1 67. 49 $223 . 41 - 25 . 03 %
3 1 x1 0. 50R1 5 $ 1 1 9. 00 $ 1 68 . 1 0 - 29. 21 %
LT21 5/ 8 5R1 6 $ 1 1 9. 00 $ 1 8 1 . 59 - 3 4. 47%
LT245/ 75R1 7 $ 1 6 1 . 00 $ 1 98 . 49 - 1 8 . 8 9%
LT28 5/ 70R1 7 $ 1 8 7. 00 $267. 8 5 - 3 0. 1 8 %
Publ i cl y avai l abl e data al s o i ndi cate there i s l i kel y pri ce depres s i on by reas on of
i mports of PVLTti res , parti cul arl y i n the peri od s i nce the s afeguard rel i ef expi red. Thi s
pri ce depres s i on appears to be accel erati ng i n the mos t recent peri od, and i n the i nteri m
peri od i t has affected pri ces i n each of the ten- di gi t HTS categori es i n whi ch PVLTti res
from Chi na enter the U. S. market.
Average Uni t Val ues of PVLTTi re Imports , 201 1 - 01 201 498
HTS
Number
201 1 201 2 201 3
Q1
201 3
Q1
201 4
1 1 to 1 3 1 3 to 1 4
401 1 1 01 01 0 $25. 8 8 $23 . 66 $23 . 93 $24. 1 8 $22. 65 - 7. 54% - 6. 34%
401 1 1 01 020 $27. 46 $28 . 1 8 $27. 50 $28 . 56 $26. 27 0. 1 5% - 8 . 05%
401 1 1 0 1 03 0 $3 3 . 98 $3 3 . 40 $32. 80 $3 4. 56 $3 1 . 3 2 - 3 . 49% - 9. 3 8 %
401 1 1 0 1 040 $40. 3 0 $40. 63 $3 9. 3 1 $41 . 04 $3 7. 49 - 2. 46% - 8 . 66%
401 1 1 0 1 050 $43 . 04 $44. 8 7 $42. 99 $44. 99 $40. 52 - 0. 1 1 % - 9. 92%
401 1 1 01 060 $40. 42 $42. 1 2 $44. 43 $45 . 09 $42. 59 9. 92% - 5. 53%
401 1 1 01 070 $47. 1 8 $47. 1 9 $59. 03 $58 . 53 $52. 26 25 . 1 2% - 1 0. 7 1 %
401 1 1 05000 $ 1 3 . 70 $ 1 5. 43 $ 1 9. 1 9 $20. 66 $ 1 9. 72 40. 1 2% - 4. 52%
401 1 201 005 $62. 3 2 $68 . 1 7 $64. 76 $69. 34 $62. 3 3 3 . 92% - 1 0. 1 1 %
401 1 2050 1 0 $62. 5 1 $67. 1 5 $73 . 57 $74. 40 $57. 8 1 1 7. 69% - 22. 29%
98 USITCTrade DataWeb, U. S. Imports for Cons umpti on, for HTS 401 1 . 1 0. 1 0, 401 1 . 1 0. 50,
401 1 . 20. 1 0. 05, and 401 1 . 20. 50. 1 0. Val ues are cus toms val ues .
I- 37
From 2011 to 2013, the average unit value per tire in most categories increased; however,
for four categories, the average unit value of imports from China fell in absolute terms
from 2011 to 2013. Price depression became more widespread in the most recent period.
In the first quarter of 2014, the average unit values of PVLT tires imported from China
were lower than they had been in the first quarter of 2013 in every single HTS category,
sometimes by substantial amounts.
The price depression accelerated after the removal of safeguard duties in
September of 2012. While in some cases average unit values remained stable shortly
after removal of relief, by the third quarter of 2013, values were below 2012 third quarter
levels for six out of ten products (including the five highest volume products, which
accounted for 83 percent of imports from China in 2013). Average unit values have
continued to fall since that time, with first quarter 2014 values below the third quarter
2013 value for seven out of ten products, again including the five highest volume
products.
Quarterly Average Unit Values of
Five Highest Volume Tire HTS Categories from China99
$50
.. ' 1 ' 0.
....00

ac m ,,, ,, , .,, ,,, , , c, ,, t.

.......................
.........
.............
......
...............at
$75
$45 $70
$40
$35
$30
$25
03201 2 04201 2 01 201 3 02201 3 Q3201 3 Q4201 3 01 201 4
PV 1 4" Rim 04 CM
$65
$60
$55
$50
PV 1 5" Rim , ==, PV 1 6" Rim PV 1 7" Rim IT Radial
In addition to underselling and pric e depression, the domestic industry may have
suffered pric e suppression by reason of Chinese PVLT tire imports.Unfortunately,
domestic produc ers do not public ly disc lose their sales revenue and c osts of goods sold
on a detailed enough basis to determine the prec ise extent of the c ost-pric e squeeze the
industry may have suffered over the period.'
In sum, public ly available data indic ates that there is widespread underselling by
Chinese PVLT tires, inc luding in some of the most popular tire sizes and by signific ant
margins.In addition, average unit values for imports from China indic ate there has also
been pric e depression over the period, partic ularly as import volumes c ontinued to rise
99 USITC Trade DataWeb, U.S.Imports for Consumption, for HTS 401 1 .1 0.1 0, 401 1 .1 0.50,
401 1 .20.1 0.05, and 401 1 .20.50.1 0.Values are c ustoms values.Volume by HTS subheading is
attac hed at Exhibit 1 -31 .
1 00 For further disc ussion of this issue, see Sec tion III.E, below.
1 -39
after the termination of safeguard rel ief. These data are consistent with industry
statements indicating that domestic tire prices have been fal l ing due to the increase in
Chinese tire imports, and that the pricing pressure is affecting the whol e range of tires on
the market.
E. Impact of Subject Imports on the Domestic Industry
Rapidl y rising imports of PVLT tires from China have had significant adverse
impacts on the domestic PVLT Tire industry.
As imports have gown, the domestic industry has l ost shipment vol ume and
market share. The steady l osses have coincided exactl y with the steady increases in
imports from China.
Vol ume of Imports and Domestic Shipments, based on RMA Data ' '
Million Tires 201 1 201 2 201 3 1 1 to 1 3
China Imports 24. 57 3 1 . 48 50. 8 3 +1 06. 8 8 %
Domestic Shipments 1 23. 29 1 1 6. 53 1 08 . 71 - 1 1 . 8 3%
China Share 9. 36% 1 1 . 97% 1 8 . 40% +9. 04%
Domestic Share 46. 90% 44. 26% 39. 46% - 7. 44%
Vol ume of Imports and Domestic Shipments, based on MTD Datal 2
Million Tires 201 1 201 2 201 3 1 1 to 1 3
China Imports 24. 57 3 1 . 48 50. 8 3 +1 06. 8 8 %
Domestic Shipments 1 25. 59 1 1 8 . 22 1 1 1 . 5 1 - 1 1 . 21 %
China Share 9. 26% 1 1 . 8 8 % 1 8 . 27% +9. 01 %
Domestic Share 47. 36% 44. 61 % 40. 07% - 7. 29%
As imports of PVLT tires from China grew each year, they steadil y gained market
share entirel y at the expense of U. S. producers. From 2011 to 2013, China increased its
' Chinese and non- subject imports are from USITC Trade DataWeb, U. S. Imports for
Consumption, for HTS 4011. 10. 10, 4011. 10. 50, 4011. 20. 10. 05, and 4011. 20. 50. 10. Domestic
shipments are the difference between RMA consumption data in Exhibit 1- 15 and total imports.
IO 2
Chinese and non- subject imports are from USITC Trade DataWeb, U. S. Imports for
Consumption, for HTS 4011. 10. 10, 4011. 10. 50, 4011. 20. 10. 05, and 4011. 20. 50. 10. Domestic
shipments are the difference between MTh consumption data in Exhibit 1- 16 and total imports.
1- 40
annual exports to the U.S. by more than 26 million tires, while domestic producers lost 14
million tire shipments. While China's shipments more than doubled, U.S. shipments f ell
by 11 percent.
As a result, imports f rom China doubled their share of the U.S. market, growing
f rom 9 to 18 percent of apparent consumption f rom 2011 to 2013. At the same time, U.S.
producers steadily lost market share, shrinking f rom 47 to 40 percent of the market.
Thus, while China gained nine percentage points of market share, domestic producers lost
seven percentage points of market share.
For every tire shipment and percentage point of domestic market share lost by
U.S. producers during the period, Chinese producers gained all of the lost shipments and
share and more.
While there is no publicly available data on the value of U.S. producers'
shipments f rom U.S. plants during the period, as noted above media reports indicate that
prices f rom many suppliers were driven down, particularly in 2013 and 2014, as imports
f rom China rose and entered at f alling prices. Thus, it is likely that the value of domestic
shipments declined as quickly, if not more quickly, than domestic shipment volumes.
Members of the domestic industry explained that these negative impacts were the
direct result of rising imports, particularly f rom China. In its 2013 Annual Report,
Cooper Tire & Rubber Co. noted that its reduced volume of sales in North America in
2013 "is a result of increased competition f rom imports."103 Similarly, the Chief
Operating Of f icer of Yokohama explained as f ollows in a 2014 interview: "The total
demand f or consumer tires was up vs. 2012, but the market share f or the U.S. industry as
103 Cooper Tire & Rubber Co. 2013 Form 10-K at 22, attached at Exhibit 1-32.
1-41
a whole was down due to the continued influx of Chinese imports."104 Another article
explained that the "increases in imports [from China] came at a time when overall U.S.
tire replacement shipments were slumping, meaning imports' share grew at the expense
of domestic production."105
The fact that rising imports of Chinese tires directly replaced domestic shipments
was further confirmed by the fact that in the fall of 2012, after the safeguard duties ended,
"more than 20% of the dealers reported a change in their top-selling tire brand to a
Chinese model."106 In the spring of 2013, a number of private brand companies were
reported to be "turning increasingly to Chinese tire company-owned brands," and new
sourcing agreements with Chinese producers were entered into by distributors including
Tire Alliance Groupe, Independent Tire Dealers Group, TBC Corp., Horizon Tire Corp.,
and Del-Nat Tire Corp.17
The growth in Chinese shipments at the expense of U.S. producers was also
evident in the growing presence of Chinese brands and suppliers in the U.S. market. One
2013 article estimate that roughly 150 of the 350 or so tire brands available to U.S.
consumers were owned by Chinese tire makers or trading companies or were private
brands made entirely or predominantly in China.108 In 2013, a large Chinese producer,
Aeolus, announced plans to launch its own brand of passenger car and light truck tires in
'
Review and 2014 Outlook with Takayuki Hamaya, Yokohama Tire Corporation's
Chief Operating Officer" (Jan. 13, 2014), attached at Exhibit 1-33.
108 Bruce Davis, "Chinese post-tariff tire imports surging," TireBusiness. com (Jan. 22, 2013),
attached at Exhibit 1-34.
16 John Healy and Nick Mitchell, "Dealers remain cautious about operating trends going
forward," Modern Tire Dealer (Dec. 18, 2012), attached at Exhibit 1-24.
17/d.
108 Bruce Davis, "Post-tariffs surge in Chinese tires, brands," TireBusiness. com (May 15,
2013), attached at Exhibit 1-35.
1-42
the U.S.19 Another Chinese producer, Double Coin Holdings Ltd., also announced plans
to launch new PVLT tire products in the U.S. in
2013.110

Out of roughly 150 tire company exhibitors at a 2012 event for the industry, more
than 50 were Chinese companies, including a dozen or so new companies that had not
previously been participating in the market.111 By the time of the same exhibition in the
fall of 2013, more than 90 Chinese tire companies participated.112 There were "plenty of
new passenger car and light truck tires from China" at the exhibition, and "almost every
type of tire was available" from the Chinese companies at the show.113 The article about
the 2013 exhibition concludes: "The Chinese companies are making their move." 114
In addition to the negative impact on domestic shipments, it appears that the
growing tide of Chinese tire imports also led domestic producers to reduce the amount of
production capacity allocated to PVLT tires. According to capacity data reported by
Modem Tire Dealer, the capacity to produce PVLT tires in U.S. plants fell from 589.3
million tires a day as of January 1, 2011 to 54 7.2 million tires a day as of January 14 ,
2014 .115 This is a seven percent decrease in industry capacity over the period.
While production data for U.S. producers' domestic operations is not publicly
available, as least one producer, Cooper Tire, reported production curtailments in 2014 at
1 9 Id
1 1
0
Bruce Davis, "Chinese post-tariff tire imports surging," TireBusiness. com (Jan. 22, 2013),
attached at Exhibit 1-34 .
111 Bruce Davis, "Post-tariffs surge in Chinese tires, brands," TireBusiness. com (May 15,
2013), attached at Exhibit 1-35.
112 Bob Ulrich, "Chinese tire companies invade Las Vegas," Modern Tire Dealer (Nov. 11,
2013), attached at Exhibit 1-36.
"31d.
114 m
115 Capacity data is attached at Exhibit 1-37.
1-4 3
i t s Nort h Ameri can f aci l i t i es . 1 1 6 In addi t i on, as not ed above, domes t i c s hi pment s f el l 1 1
percent f rom 201 1 t o 201 3. If product i on di d not decl i ne by a s i mi l ar amount , i t means
t he domes t i c i ndus t ry i s burdened wi t h growi ng i nvent ori es . If product i on di d decl i ne by
t he s ame 1 1 percent as s hi pment s , i t i ndi cat es t hat domes t i c capaci t y ut i l i zat i on rat es al s o
f el l , as product i on dropped more qui ckl y t han capaci t y. The t i res i ndus t ry i s hi ghl y
capi t al -i nt ens i ve, maki ng any decl i ne i n capaci t y ut i l i zat i on part i cul arl y probl emat i c f or
t he domes t i c i ndus t ry.
In addi t i on t o decl i nes i n s hi pment s , market s hare, capaci t y, and capaci t y
ut i l i zat i on, t here appears t o have been a decl i ne i n domes t i c empl oyment duri ng t he
peri od as Chi nes e i mport s ros e. In 201 1 , Goodyear's pl ant i n Uni on Ci t y, Tennes s ee
permanent l y cl os ed, el i mi nat i ng approxi mat el y 1 ,800 jobs at t he f aci l i t y. 1 1 7 The workers
were cert i f i ed f or Trade Adjus t ment As s i s t ance, bas ed on t he Depart ment of Labor's
f i ndi ng t hat i ncreas ed i mport s of PVLT t i res cont ri but ed i mport ant l y t o t he workers ' job
l os s . 1 1 8 In Oct ober of 201 3, Mi chel i n announced i t was goi ng t o l ay of f nearl y 1 00
workers at i t s PVLT t i re pl ant i n Tus cal oos a, Al abama. 1 1 9 Accordi ng t o t he pres i dent of
t he Uni t ed St eel workers l ocal repres ent i ng workers at t he pl ant , t he l ayof f s were due t o a
s of t economy as wel l as "i mport compet i t i on. "1 2
None of t he publ i cl y t raded compani es t hat produce PVLT t i res i n t he Uni t ed
St at es report s U. S. product i on, s al es , cos t s of goods s ol d, empl oyment , operat i ng i ncome,
1 1 6 "Fai l ed merger cont ri but ed t o l ower i ncome f or cooper," RubberNews . com (Mar. 1 4,
201 4), at t ached at Exhi bi t 1 -38.
1 1 7 "Goodyear Cl os es Tennes s ee Pl ant " (Feb. 1 0, 201 1 ), at t ached at Exhi bi t 1 -39.
1 1 8 TAA Cert i f i cat i on No. 7 5,252, at t ached at Exhi bi t 1 -40.
1 1 9 Mi l es Moore, "Mi chel i n t o l ay of f nearl y 1 00 at Goodri ch pl ant i n Al a. ," RubberNews . com
(Oct . 1 4, 201 3), at t ached at Exhi bi t 1 -41 .
'201d.
I-44
or capital investments in a sufficiently detailed matter to enable an analysis of domestic
industry trends over the period. 1 2 1 While some companies report certain line items for
the North American market, these line items are unrepresentative for several reasons.
First, they include all tires, including bus, truck, off-the-road, agricultural, and other tires,
and thus are not limited to PVLT tires.1 2 2 Second, they include sales in Canada and
Mexico, as well as the United States. Third, they include the companies' production
operations in Canada and Mexico. As demonstrated in Exhibit 1 -3, four U.S. producers
Bridgestone, Goodyear, Michelin, and Pirelli also have facilities in Canada and/or
Mexico. 1 2 3 Fourth, sales in the U.S. would include not only sales of domestically-
produced tires, but also sales of tires imported into the U.S. from other countries. As
shown in Exhibit 1 -1 0, each of the domestic producers also imports at least some PVLT
tires into the United States from other countries, including China. In addition to their
offshore locations in China, Canada, and Mexico, U.S. companies have operations in
other countries that are significant import sources for the U.S., including Indonesia,
Taiwan, and Thailand.1 2 4 For all of these reasons, figures on North American sales and
income in the companies' financial statements do not provide reliable indications of the
fmancial performance of the companies' U.S. PVLT tires operations.
1 2 1 See annual report excerpts, attached at Exhibit 1 -42 . Bridgestone does not report any
items for the North American region but only the Americas, which includes Latin America.
Specialty Tire is not publicly traded.
In See id.
1 2 3 Bridgestone has plants in J oliette, Quebec, Monterrey, Mexico, and Cuernavaca, Mexico.
Goodyear has plants in Medicine Hat, Alberta and Napanee, Ontario. Michelin has three plants in
Nova Scotia and one in Queretaro, Mexico. Pirelli has a plant in Guanajuato, Mexico.
1 2 4
U producers' global locations are attached at Exhibit 1 -43.
1 -45
There i s , however, anecdotal evi dence that U.S. producers ' fmanci al performance
li kely s uffered as s hi pments , market s hare, capaci ty, capaci ty uti li zati on, and employment
decli ned whi le aggres s i vely pri ced i mports of PVLT ti res from Chi na i ncreas ed.
At the end of 2013, domes ti c ti re manufacturers i ntervi ewed by an i ndus try
publi cati on "tend to agree that 2013 ended up bei ng a di ffi cult year for the i ndus try, mos t
notable becaus e of the adjus tments that had to be made wi th the removal of tari ffs on
Chi nes e-made pas s enger and li ght truck ti res and low-pri ce product comi ng
i n.51125
Accordi ng to a forei gn producer that exports to the U.S., thos e producers that di d reduce
pri ces to mai ntai n volume i n the face of ri s i ng Chi nes e i mports di d s o "at a cos t and that
cos t was pri ce and profi t .... Expectati on of pri ce levels of profi t, even though we knew i t
was goi ng to drop, i t was even more s evere than expectati ons for 2013.126 In addi ti on,
one domes ti c producer, Yokohama, noted: "There are many low-cos t i mports , whi ch are
i mpacti ng everyone i n the market."127
The advers e market condi ti ons res ulti ng from the i nflux of low-pri ced ti res from
Chi na als o affected uni on contract negoti ati ons conducted by two of the larges t U.S.
producers i n 2013. Goodyear's new contract capped the company's legacy pens i on
obli gati ons , reduced the percentage of earni ngs pai d out and the maxi mum annual
payments to employees under the company's profi t-s hari ng plan, and kept overall wage
cos ts neutral for the company. 128 The contract als o gi ves Goodyear the abi li ty to reduce
125 Jenni fer Karpus , "Ti re makers are opti mi s ti c des pi te economi c concerns , "
RubberNews . com (Jan. 30, 2014), attached at Exhi bi t 1-28 .
128
' 27 1d.
128 See "Goodyear outli nes contract detai ls , " Modern Ti re Dealer (Aug. 27, 2013), attached at
Exhi bi t 1-44. See als o Goodyear, "North Ameri ca Uni ted Steelworkers 2013 Agreement
Conference Call" (Aug. 27, 2013), attached at Exhi bi t 1-45.
1-46
staffing by up to 15 percent at each facil ity. 12 9 When Michel in compl eted contract
negotiations in 2 013, the company noted that the agreement was reached "in a very cost
competitive and chal l enging environment. "130
Final l y, it is worth noting that, in the recent past, rising import vol umes from
China have l ed to deteriorating financial performance for the domestic industry and
resul ted in the cl osure of U. S. facil ities where profits appeared to be inadequate to sustain
continued production. In the China-specific safeguard investigation, the Commission
found that there was "a direct and significant connection" between rapidl y rising imports
of PVLT tires from China and the domestic industry's deteriorating financial
performance and decl ining capacity, production, shipments, and empl oyment. 131 In that
case, imports had tripl ed over a five year period, coinciding with a decl ine in the
domestic industry's operating income, which was negative at the end of the period as
imports peaked. 132 The Commission al so found that "the substantial reduction in
domestic capacity and the cl osures of U. S. pl ants during the period examined were
l argel y in reaction to the significant and increasing vol ume of subject imports from China
'9 133
In 2 013, imports of PVLT tires from China exceeded 50 mil l ion this is even
higher than the peak of 46 mil l ion tires reached in 2 008, the l ast ful l year previousl y
'2 9 1d.

' 3 0 "BFGoodrich pl ant workers ratify agreement," Mo dern Tire Dealer (Aug. 2 6, 2 013),
attached at Exhibit 1-46.
131 Tires 42 1 Investigation at 2 4.
'32 1d at 2 2 -2 3.
'331d. at 2 4.
I-47
examined by the Commission.I34 Subject imports have continued to grow in 2014. Thus,
imports are now higher than the large volumes that led to operating losses and plant
closings that were found to demonstrate the existence of material injury in the pre-
safeguard period. As detailed above, declines in shipments, market share, capacity,
capacity utilization, and employment all demonstrate that the domestic industry is again
suffering material injury by reason of PVLT tire imports from China.
F. Threat of Material Injury
The domestic industry is not only suffering material injury at the present time; it
is also imminently threatened with additional material injury absent relief from dumped
and subsidized imports from China.
In assessing the threat of material injury, the statute directs the Commission to
consider, among other factors, the extent of subsidies involved and whether any such
subsidies are prohibited subsidies, unused capacity and capacity expansions, and the
volume and prices of subject imports.135 Each of these factors is met in this case.
First, with regard to subsidies, Volume III of these petitions documents the wide
range of subsidies available to PVLT tire producers in China, including an array of export
subsidies. Export subsidies alleged to benefit PVLT tires producers in China include:
1) Discounted Loans for Export-Oriented Enterprises and Export Loan Interest
Subsidies;
2) Export Seller's Credit;
3) Export Buyer's Credit;
4) Other Export Financing from State-Owned Banks;
'341d. at 22.
135 19 U.S.C. 1677(7)(F).
1-48
5) Export Credit Insurance Subsidies;
6) Export Credit Guarantees;
7) Provision of Land-Use Rights for FLEs for Less Than Adequate Remuneration
(including based on export performance);
8) Preferential Electricity Rates for Export-Oriented FlEs;
9) Preferential Water Rates for Export-Oriented FIEs;
1 0 ) Famous Brands Program;
1 1 ) Export Interest Subsidy Funds for Enterprises Located in Guangdong and
Zhejiang Provinces; and
1 2) Funds for "Outward Expansion" of Industries in Guangdong Province. 1 3 6
As the Commission has recognized, Congress considered export subsidies "to be more
likely to threaten material injury" than purely domestic subsidies "because they are
directed specifically at the export market." 1 3 7
The wide array of subsidies available to the PVLT tires industry in China is
specifically designed to increase domestic production and exports. PVLT tires have been
identified by the Government of China as high-tech products for export, meaning that the
government has adopted an official policy of promoting the export of PVLT tires. 1 3 8 The
Government of China has also adopted a Tire Industty Policy to encourage the
development of radial tires by Chinese producers. The policy sets target rates for
radialization of the industry and encourages the adoption of new technology to develop
1 3 6 See Volume III.
1 3 7 Leather Wearing Apparel from Uruguay, Inv. No. 70 1 -TA-68 (Final), USITC Pub. 1 1 44
(May 1 981 ) at 1 3 -1 4; H.R. Rep. No. 96-3 1 7, at 43 (1 979).
1 3 8 Volume HI of these petitions at 1 1 1 -7 1 1 1 -8.
1 -49
newt i r e pr oduct s.139 The Gover nment of Chi na has also adopt ed poli ci es t o develop and
encour age t he pr oduct i on of speci al r aw mat er i als for hi gh-per for mance r adi al t i r es.14
Pr ovi nci al and local gover nment s have adopt ed si mi lar poli ci es, i ncludi ng, i n 2011, t he
gover nment -backed cr eat i on of a "Rubber Valley" i n Shandong Pr ovi nce t o "make t he
i ndust r y bi gger and st r onger i n fi er ce i nt er nat i onal compet i t i on." 14 1
In addi t i on t o subsi dy pr ogr ams desi gned t o st i mulat e expor t s, t he Gover nment of
Chi na has also i mposed per for mance r equi r ement s on for ei gn 'i nvest or s t hat r equi r e t hem
t o expor t i n r et ur n for i nvest ment appr oval. Dur i ng t he Commi ssi on's Chi na-speci fi c
safeguar d i nvest i gat i on, Cooper speci fi cally r equest ed t hat i f a quot a wer e i mposed i t be
admi ni st er ed by t he U.S. gover nment so as t o per mi t Cooper t o cont i nue expor t i ng t i r es
fr om Chi na t o t he Uni t ed St at es, because i t was r equi r ed t o expor t ever y t i r e pr oduced at
i t s plant i n Kushan, Chi na fr om 2008 t hr ough 2012: "Cooper explai ns t hat i t i s concer ned
about how a quot a would be admi ni st er ed pr ocedur ally because i t s busi ness li cense for i t s
Kushan plant i n Chi na r equi r es Cooper t o expor t all t he t i r es pr oduced i n t he plant dur i ng
t he fi r st fi ve year s; pr oduct i on at t he plant began i n Febr uar y 2008." 14 2 Such expor t
r equi r ement s, t o t he ext ent t hey cont i nue t o apply t o ot her pr oducer s i n Chi na, pose an
addi t i onal t hr eat t o t he U.S. i ndust r y.
Second, publi cly avai lable i nfor mat i on i ndi cat es t hat t hese pr oducer s ar e i n fact
addi ng capaci t y and r ampi ng up pr oduct i on and expor t s consi st ent wi t h t hese poli ci es.
Fr om 2006 t o 2012, for example, Chi nese t i r e pr oduct i on ballooned fr om 280 mi lli on set s
'391d. at 111-8 111-9.
'4 01d. at L TI-1 0 III-1 1.
'4 11d. at 111-13 111-17.
14 2 Ti r es 421 Invest igat i onat 34 n.190.
1-50
of t i r e s t o 470 mi lli on t i r e s e t s . 1 43 Chi na account s for a quar t e r of global pr oduct i on, and
i t i s now t he wor ld's lar ge s t pr oduce r and e xpor t e r of t i r e s . ' "The s e mas s i ve addi t i ons t o
capaci t y and pr oduct i on wi ll only cont i nue i n t he i mmi ne nt fut ur e .
In 201 3 , t i r e make r s budge t e d about $1 . 4 bi lli on t owar ds e xpandi ng and addi ng
capaci t y i n Chi na. 1 45 A s ummar y of s ome of t he mor e s i gni fi cant r e ce nt and planne d
capaci t y e xpans i on pr oje ct s i n Chi na i s be low.
Ke nda Rubbe r Indus t r i al has announce d plans t o i ncr e as e capaci t y i n i t s Ti anji n
faci li t y by 5,000 t i r e s a day and i n i t s Shanghai faci li t y by 2,500 t i r e s a day. 1 "
Pi r e lli plans t o i nve s t $200 mi lli on i n i t s Yanzhou, Chi na plant t o mor e t han
double car t i r e capaci t y t o 1 0 mi lli on uni t s and t o i ncr e as e t i r e capaci t y t o 850,00
uni t s , maki ng t he faci li t y Pi r e lli 's lar ge s t i n t he wor ld.
1 47

Te chki ng Tyr e s has plans t o bui ld a ne w $400 mi lli on car and li ght t r uck t i r e plant
i n Shandong, Chi na, wi t h an i ni t i al capaci t y of 2 mi lli on t i r e s t hat could i ncr e as e
t o 5 mi lli on by 201 5. 1 48
Maxxi s Int e r nat i onal/Che ng Shi n Int e r nat i onal announce d a $1 50 mi lli on
i nve s t me nt i n a ne w t i r e t e s t pr ovi ng gr ound ne xt t o i t s plant i n Kus han Ci t y,
Chi na. 1 49
In Januar y of 201 4, Yokohama announce d t hat i t i s bui ldi ng a ne w pas s e nge r car
faci li t y i n Chi na, wi t h pr oduct i on s lat e d t o be gi n i n Apr i l of 201 4. 1 '0
Br i dge s t one i s planni ng t o i nve s t $1 40 mi lli on t o boos t car t i r e capaci t y at i t s
plant i n Wuxi , Chi na by 3 1 pe r ce nt . 1 51
1 43 Ae olus , "Exe cut e gr e e n manufact ur i ng; Le ad t r ans for mat i on & upgr adi ng" (201 3 ) at s li de
1 3 , at t ache d at Exhi bi t 1 -47.
1 44
1 45 Br uce Davi s , "Ti r e make r s ' i nfr as t r uct ur e s pe ndi ng down, but s t i ll huge ,"
Rubbe rNe ws . com (Se pt . 9 , 201 3 ), at t ache d at Exhi bi t 1 -48.
1 46 Id.
1 47 i
d
1 48 m
'49 1d.
1 5 Yokohama, "Ne w Pas s e nge r Car Tyr e Plant i n Chi na"(Jan. 23 , 201 4), at t ache d at Exhi bi t
1 -49 .
Finally, numerous major Chinese producers are engaged in specific projects to expand
capacity and upgrade equipment at their existing plants in China. Alist of these projects
is attached at Exhibit 1-51. These expansions will increase the supply available to
swamp lucrative export markets. While China's own automotive market is also growing,
as one U.S. tire distributor observed, "... it's going to be some time before they [China]
can consume a substantial percentage of the tires that they're producing today."152
Third, it is highly likely that a significant portion of this new production will be
directed at the highly attractive U.S. market if relief is not imposed. China has
demonstrated its willingness and ability to rapidly shift export volumes to the U.S.
market when duty relief is not in place.
China's Exports of Passenger Car Tires to the World153
KGs 201 1 201 2 201 3
U. S . 290, 41 1 , 98 7 379, 5 99, 01 1 5 61 , 8 74, 463
EU 442 , 68 7, 303 376, 5 1 6, 95 8 408 , 48 8 , 469
Japan 3 0, 740, 2 1 7 36, 033, 05 4 36, 61 7, 664
Worl d 1 , 41 9, 8 65 , 762 1 , 5 06, 749, 790 1 , 75 5 , 41 7, 8 3 0
U. S . %Worl d 20. 45 % 2 5 . 1 9% 32 . 01 %
Chinese export data show that China has quickly increased export volume to the U.S.
since the safeguard expired in September of 2012. In 2011, the U.S absorbed 20.5
percent of China's passenger car tire exports; by 2013, that share had jumped to 32
percent.
151 "Bridgestone to expand China car tire plant," TireBusiness. com (Oct. 30, 2013), attached
at Exhibit 1-50.
152 William Schertz, "Del-Nat expanding its Chinese tire offerings," TireBusiness. com (Apr.
28, 2014), attached at Exhibit 1-29.
153 Source is China Customs data for HS 4011.10. Export data for light truck tires cannot be
isolated from non-subject heavy truck and bus tires at the six digit level and are thus not included.
1-52
The attractiveness of the U.S. market if duties are not in place is further
demonstrated by the substantial efforts importers undertook to evade the safeguard relief
when it was in place. Del-Nat, a major U.S. dealer cooperative, acquired Free Trade
Zone status for its warehouse specifically so it could import tires from China duty-free
while the safeguard was in place and be able to remove those tires for immediate sale as
soon as the safeguard expired, without waiting for them to be shipped from China.154 As
one article explained: "With the three-year run of elevated tariffs on Chinese consumer
tire imports set to expire on Sept. 26, key players in the field are preparing to resume
shipping [Chinese] tires ' at 12:01 on the 27 th' ...."155
In addition, it appears some importers may have sought to avoid the discipline of
the safeguard duties by shipping subject tires through basket "other" tire categories.
"Other" Tire Imports from China156
Million Tires
2 007 2 008 2009 20 1 0 2 0 1 1 201 2
1 2 . 1 4 1 1 . 1 2 1 0 . 48 2 3 . 65 2 1 . 94 22 . 49
The import data show that imports of "other" tires from China were declining steadily
before relief was imposed in September of 2009. Imports in these basket categories more
than doubled the year after relief was imposed, and remained elevated while duties were
in place. This highly unusual pattern further demonstrates Chinese producers' ardent
interest in the attractive U.S. market.
154 Bruce Davis, "Prepping for tariffs' end," TireBusiness. com (Sept. 14, 2012), attached at
Exhibit 1-52.
' 551
d.
156 USITC Trade DataWeb, Imports for Consumption, for categories 4011.99.45 and
4011.99.85.
1-53
The attractiveness of the U.S. market as the prime target for China's exports is
further demonstrated by the existence of antidumping orders on Chinese tires in other
third country markets. Imports of Chinese passenger car tires are subject to antidumping
measures in Brazil, Egypt, India, Colombia, and Turkey.157 With the exception of the
Turkish measure, these measures were imposed in the last five years.
Fourth, the significant rate of increase of the volume and market penetration of
Chinese imports since 2011, and particularly since safeguard relief terminated in
September of 2012, indicates the likelihood of substantially increased imports in the
imminent future if relief is not imposed. As noted above, Chinese exports of PVLT Tires
to the U.S. more than doubled from 2011 to 2013, and their share of the U.S. market also
doubled. Imports rose by 24.6 percent in the first quarter of 2014, and likely also gained
increased market share given the low projected growth in demand. The tables below
project 2014 annual shipments if China maintains its first quarter rate of growth through
the rest of 2014 and demand in fact rises as slowly as predicted.
157 See G/ADP/N/2521BRA, 28 March 2014, Semi-Annual Report Under Article 1 6. 4 of the
Agreement: Brazil; G/ADP/N/252/EGY, 17 January 2014, Semi- Annual Report Under Article
1 6. 4 of theAgreemen t: Egypt; G/ADPN/252/1ND, 15 April 2014, Semi-Annual Report Under
Article 1 6. 4 of theAgreemen t: India; G/ADP/N/252/COL, 21 March 2014, Semi-Annual Report
Under Article 1 6. 4 of theAgreement : Colombia ; and G/ADP/N/252/TUR, 24 January 2014,
Semi-Annual Report Under Article 1 6. 4 of theAgreement: Turkey. Excerpts attached at Exhibit
1- 53. A number of the notifications refer to truck and bus tires, a 6- digit harmonized HS category
in which light truck tires are typically included.
1- 54
Volume of Imports and Domestic Shipments, based on RMAData158
Million Tires 201 3 2014e
Total Consumption 275 . 5 279. 70
China Imports 50. 83 63. 32
Non- Subj ect Imports 1 1 5 . 96 1 1 8 . 36
Domestic Shipments 1 08 . 71 98 . 02
Domestic Share 39. 46% 35 . 04%
Volume of Imports and Domestic Shipments, based on MTD Data159
Million Tires 2013 2014e
Total Consumption 278 . 3 282. 50
China Imports 50. 83 63. 32
Non- Subj ect Imports 1 1 5 . 96 1 1 8 . 36
Domestic Shipments 1 1 1 . 5 1 1 00. 82
Domestic Share 40. 07% 35 . 69%
If relief is not imposed and dumped and subsidized imports from China are allowed to
continue at their current pace, the domestic industry will sacrifice another four percentage
points of market share and lose more than 10 million tire shipments in 2014 alone. The
loss of 10 million tires is enough to shut down a U. S. tire facility this year. And it would
come on the heels of the 14 million tire shipments the domestic industry has already lost
to Chinese imports from 2011 to 2013.
Plants at risk if relief is not imposed include:16
158 RMA consumption data is in Exhibit 1- 15. Consumption for 2014 is estimated by adding
the 4. 2 million additional tire shipments predicted in Exhibit 1- 14. Chinese and non- subj ect
imports are from USITC Trade DataWeb, U. S. Imports for Consumption, for HTS 4011. 10. 10,
4011. 10. 50, 4011. 20. 10. 05, and 4011. 20. 50. 10, with annual 2014 imports estimated based on
growth in first quarter 2014. Domestic shipments are the difference between consumption and
imports.
159 MTD consumption data is in Exhibit 1- 16. Consumption for 2014 is estimated by adding
the 4. 2 million additional tire shipments predicted in Exhibit 1- 14. Chinese and non- subj ect
imports are from USITC Trade DataWeb, U. S. Imports for Consumption, for HTS 4011. 10. 10,
4011. 10. 50, 4011. 20. 10. 05, and 4011. 20. 50. 10, with annual 2014 imports estimated based on
growth in first quarter 2014. Domestic shipments are the difference between consumption and
imports.
I- 55
Cooper Tire, Findlay, OH (23,000/day; 8,395,000/year)
Goodyear, Buffalo, NY (6,500/day; 2,372,500/year)
Goodyear, Gadsden, AL (26,000/day; 9,490,000/year)
Michelin, Ft Wayne, IN (30,500/day; 11,132,500/year)
Michelin, Tuscaloosa, AL (30,000/day; 10,950,000/year)
Yokohama, Salem, VA (26,800/day; 9,782,000/year)
Indeed, an article published on April 7, 2014 concluded that the rapid rise in Chinese
imports so far, along with a recent announcement that Michelin will phase out car tire
production at a plant in Nova Scotia, is evidence that plants in the U.S. are also "in
1
jeopardy.''
61

The threat of substantially increased import volume if relief is not imposed is also
evident in the aggressive push that Chinese manufacturers have made to ramp up their
presence in the U.S. market since the expiration of the safeguard duties. As detailed in
Section IH.E, above, since the expiration of the safeguard measure, large and rapidly
growing numbers of Chinese producers have courted buyers at industry exhibitions,
numerous tire dealers have announced agreements to source more tires from China, and
Chinese producers have announced plans to establish their own new or expanded
presence in the U.S. market.
Fifth, the prices at which PVLT tires from China are entering the U.S. market are
likely to have a significant depressing or suppressing effect on U.S. prices and are likely
160 Daily plant capacities are attached at Exhibit 1- 3. Annual capacity is estimated by
multiplying daily capacity by 365.
161 "Editorial: Tariffs hampered U.S. passenger, LT production," RubberNews. com (Apr. 7,
2014), attached at Exhibit 1- 26.
1- 56
to increase the demand for imports even further. As described in Section III.D, above,
average unit values for all categories of tires are lower in the first quarter of 2014 than
they were in the first quarter of 2013, and prices for the highest volume products have
been declining steadily since safeguard relief terminated. Moreover, numerous industry
sources indicate that the plummeting prices for Chinese tires has affected the entire
market, forcing other producers to also lower prices to compete or risk losing volume.
As import prices have fallen, import volumes have risen at the expense of domestic
producers. If duties are not imposed, these trends will only worsen, threatening the
domestic industry and its workers with further injury.
For all of these reasons, the domestic PVLT tire industry and its workers are
threatened with further injury by reason of subject imports if orders are not imposed.
IV. CONCLUSION
Based on the information reasonably available to the petitioner and presented in
these petitions, PVLT tires from China are being dumped in the U.S. market, they benefit
from countervailable subsidies, and they are causing and threatening to cause injury to
the domestic PVLT tires industry. Accordingly, the petitioner respectfully requests that
the U.S. Department of Commerce initiate antidumping and countervailing duty
investigations on imports of PVLT tires from China and issue affirmative determinations
in each investigation. The petitioner further requests that the U.S. International Trade
Commission initiate investigations into material injury, including threat of material
injury, to the domestic industry by reason of subject imports and issue affirmative
determinations of injury.
VOLUMEI GENERALISSUES AND INJURY
TABLEOF EXHIBITS
I-1. DomesticProducersof PVLTTires
1-2. TireMarketing Materialsfromtirerack. corn
1-3. NorthAmerican TirePlantCapacities, asof Jan. 1, 2014, Modern TireDealer
1-4. IndustrySupportCalculation
I-5. U.S. TireProducers' RelationshipswithChineseProducersand ImportsfromChina
1-6. 2014 Tireand RimAssociation Yearbook (excerpts)
1-7. Harmonized Tariff ScheduleExcerpts
1-8. Requested ScopeLanguage
1-9. Foreign Producersand Exportersof PVLTTires fromChina
I-10. Importersof PVLTTires fromChina
I-11. Popular TireSizes, 2012
I-12. NegligibilityCalculations
1-13. Sean McAlinden and Yen Chen, "CAR' s U.S. VehicleSales, Production, &
EmploymentOutlook First Quarter January2014," Center for Automotive
Research
1-14. Bob Ulrich, "Thesignpostsup ahead? Tiresales," Modern TireDealer (Jan. 2014)
1-15. Rubber Manufacturers' Association PressReleaseson U.S. Shipments
1-16. U.S. Shipmentsfrom Modern TireDealer
1-17. NHTSA, "Importation and Certification Facts"
1-18. NHTSA, Consumer Guideto UniformTireQuality Grading (July 2013)
1-19. Examplesof Tires Madein BoththeU.S. and China fromtirerack. corn
1-20. "Top U.S. Commercial TireDealers," Modern TireDealer (Oct. 2013)
1-21. Del-NatWebsiteExcerpts
1-22. ImportData by CustomsDistrict
1-23. Hankook 2012 Annual Report (excerpt)
1-24. John Healy and Nick Mitchell, "Dealers remain cautious about operating trends going
forward," Modern Tire Dealer (Dec. 18, 2012)
1-25. John Healy and Nick Mitchell, "Service sales are seen as bright spot in an otherwise
soft market," Modern Tire Dealer (May 21, 2013)
1-26. "Editorial: Tariffs hampered U.S. passenger, LT production," RubberNews. com (Apr.
7, 2014)
1-27. Bob Bissler, "Yokohama plants roots in U.S. soil," Modern Tire Dealer (Nov. 4, 2013)
1-28. Jennifer Karpus, "Tire makers are optimistic despite economic concerns,"
RubberNews. com (Jan. 30, 2014)
1-29. William Schertz, "Del-Nat expanding its Chinese tire offerings," TireBusiness. com
(Apr. 28, 2014)
1-30. Tire Marketing Materials from simpletire. com
1-31. Import Volume by HTS Subheading
1-32. Cooper Tire & Rubber Co. 2013 Form 10-K (excerpt)
1-33. "2013 Review and 2014 Outlook with Takayuki Hamaya, Yokohama Tire
Corporation's Chief Operating Officer" (Jan. 13, 2014)
1-34. Bruce Davis, "Chinese post-tariff tire imports surging," TireBusiness. com (Jan. 22,
2013)
1-35. Bruce Davis, "Post-tariffs surge in Chinese tires, brands," TireBusiness. com (May 15,
2013)
1-36. Bob Ulrich, "Chinese tire companies invade Las Vegas," Modern Tire Dealer (Nov.
11, 2013)
1-37. NorthAmerican Tire Plant Capacities, as of Jan. 1, 2011 and Jan. 1, 2014, Modern
Tire Dealer
1-38. "Failed merger contributed to lower income for cooper," RubberNews. com (Mar. 14,
2014)
1-39. "Goodyear Closes Tennessee Plant" (Feb. 10, 2011)
1-40. TAA Certification No. 75,252
1-41. Miles Moore, "Michelin to lay off nearly 100 at Goodrich plant in Ala.,"
RubberNews. com (Oct. 14, 2013)
1-42. U.S. PVLT Tire Producers' Annual Report Excerpts
1-43. U.S. PVLT Tire Producers' Global Locations
1-44. "Goodyear outlines contract details," Modern Tire Dealer (Aug. 27, 2013)
1-45. Goodyear, "North America United Steelworkers 2013 Agreement Conference Call"
(Aug. 27, 2013)
1-46. "BFGoodrich plant workers ratify agreement," Modern Tire Dealer (Aug. 26, 2013)
1-47. Aeolus, "Execute green manufacturing; Lead transformation & upgrading" (2013)
1-48. Bruce Davis, "Tire makers' infrastructure spending down, but still huge,"
RubberNews. com (Sept. 9, 2013)
1-49. Yokohama, "New Passenger Car Tyre Plant in China" (Jan. 23, 2014)
I-50. "Bridgestone to expand China car tire plant," TireBusiness. com (Oct. 30, 2013)
1-51. "Intending Projects," China Rubber (2013)
1-52. Bruce Davis, "Prepping for tariffs' end," TireBusiness. com (Sept. 14, 2012)
1-53. Excerpts from Semi-Annual WTO Antidumping Reports from Brazil, Egypt, India,
Colombia, and Turkey