Business Maverick

ANTI-DUMPING DUTIES

Trade body hikes costs of importing cheap tyres in lifeline for regional industry

Trade body hikes costs of importing cheap tyres in lifeline for regional industry
(Photo: Unsplash / Robert Laursoo)

Evidence revealed that tyres being imported into the Southern African Customs Union at dumped prices were causing material injury to the regional industry.

South Africa is not a dump site, at least not for cheap tyres. The International Trade Administration Commission (Itac) has recommended that the Minister of Trade, Industry and Competition impose anti-dumping duties of between 7.18% and 43.6% on new tyres imported from China for cars, trucks and buses.

The duties will remain in place for five years until July 2028.

Itac launched an investigation last year, in response to an application by the South African Tyre Manufacturers Conference (SATMC) for anti-dumping duties to protect the local market, which the industry body said would rescue the local tyre industry and the livelihoods dependent upon it.

The commission considered that there was prima facie evidence that the products were being imported into the Southern African Customs Union at dumped prices, causing material injury and threatening to cause material injury to the industry.

“Dumping” is intentional price discrimination where a product is sold in the importing country for less than the price of that product in the exporting country’s market.

SATMC represents the four tyre manufacturing companies in South Africa – Bridgestone, Continental, Goodyear and Sumitomo Rubber – on trade, economic and environmental policies, and tyre sector regulations. Together, these manufacturers produce 100% of the local tyre supply.

At the time, SATMC managing executive Nduduzo Chala said they were not against healthy trade and competition at fair prices, but rather against “certain Chinese designed and manufactured tyres that are imported unfairly into South Africa at unsustainable, rock-bottom rates. 

“This limits the competitiveness of domestic manufacturers who employ more than 6,000 people directly in South Africa and create indirect employment opportunities for more than 19,000 people.”

SATMC companies also work with tyre importers, who demonstrate fair pricing, prioritise quality and safety, and are able to offer excellent after-sales service, guarantees and insurance, uplifting the domestic tyre sector and road safety industry as a whole, he said.

Itac had initially asked for a provisional duty to be imposed for a period of six months while an investigation was being finalised. These measures were imposed from 9 September 2022 to 8 March 2023, which meant that importers of the products were eligible for a refund of any duties paid to the SA Revenue Service after following due processes.

DTIC minister Ebrahim Patel has approved the commission’s recommendation but noted concerns about the possible impact on prices for consumers, which is why the ministry is in talks with tyre manufacturers in SA on the moderation and restraint of price increases. 

Itac said Patel had asked the Competition Commission to monitor the prices of tyres. 

“The minister further indicated that if the undertakings on price restraint by the tyre manufacturing companies are not honoured, resulting in undue price increases on tyres, he will request the Minister of Finance to suspend the anti-dumping duties for a period of time.”

The SATMC has welcomed the decision on the anti-dumping duties, saying fairly traded imports from other countries will continue unaffected into the Southern African Customs Union.

Chala said they applauded the “decisive measure” as a significant victory for the domestic tyre industry. 

“The implementation of these final anti-dumping duties will serve to uphold fair trade practices and protect the economy against opportunistic pricing in the tyre sector, which has posed a threat to the future of the South African tyre industry.” DM

Gallery

Comments - Please in order to comment.

  • Helmut Straeuli says:

    A bit like closing the barn door when most of the horses have bolted. How many other industries could have benefited from this kind of protection!

Please peer review 3 community comments before your comment can be posted

We would like our readers to start paying for Daily Maverick...

…but we are not going to force you to. Over 10 million users come to us each month for the news. We have not put it behind a paywall because the truth should not be a luxury.

Instead we ask our readers who can afford to contribute, even a small amount each month, to do so.

If you appreciate it and want to see us keep going then please consider contributing whatever you can.

Support Daily Maverick→
Payment options

Otsile Nkadimeng - photo by Thom Pierce

A new community Actionist every week.

Meet the South Africans making a difference. Get Maverick Citizen in your inbox.