Cooper prepares for possible import duties

ERJ staff report (TB)

Findlay, Ohio - Cooper Tire & Rubber Co. is preparing contingency plans for maintaining supplies to US dealers should the Obama administration choose to impose duties on Chinese tyres imported into the US, Chairman Roy Armes told analysts.

Mr. Armes declined to say specifically what Cooper intends to do - saying the issue still has too many variables to consider - nor what impact it might have on Cooper's finances.

Cooper imports several million passenger and light truck tyres annually from two joint venture factories in China, the majority-owned Cooper Chengshan (Shandong) Tire Co. Ltd. plant in Chengshan and the Cooper Kenda Tire (Kunshan) Tire Co. Ltd. 50-50 joint venture in Kunshan. The plant, with 5,000 units of daily capacity, manufactures exclusively for Cooper through 2012.

The US International Trade Commission, responding to a petition by the United Steelworkers, is recommending the Obama adminstration impose duties on imports of Chinese-made passenger and light truck tyres for three years, starting at 55 percent of value, then dropping to 45 and 35 percent in subsequent years.

Imports of passenger tyres grew to 39.6 million units last year, valued at $1.23 billion, and imports of light truck tyres were 6.54 million units, or $333.6 million, according to US Department of Commerce data.

Cooper is looking at the “reality of various scenarios,” Mr. Armes said. “Given a reasonable enough amount of time,…we feel we can deliver most of the tyres” obligated to dealers.

The Obama administration has until Sept. 17 to make a ruling on the issue. The Office of the U.S. Trade Representative is holding meetings Aug. 7 with interested parties to gather more information.

From Tire Business (A Crain publication)