ITC Ignored Profits of US Tire Industry When Finding Injury Due to Thai Imports, Exporters Argue

The International Trade Commission ignored that the domestic tire industry was profitable when it made its determination that passenger vehicle and light truck tires from South Korea, Taiwan, Thailand and Vietnam were harming the domestic industry, plaintiffs led by Sentury Tire (Thailand) Co. said in a Sept. 17 complaint at the Court of International Trade. Sentury also argued that the commission failed to properly consider the effects of the COVID-19 pandemic on the domestic industry (Sentury Tire (Thailand) Co. Ltd., et al. v. United States, CIT #21-00439).

The language of the complaint echoes that of a Sept. 16 complaint filed by Sumitomo Rubber (Thailand) Co., which also challenged the ITC's decision as having failed to properly account for the effects of the pandemic (see 2109160061). Both complaints also lean on the dissenting opinion from ITC Commissioner David Johanson.

The commissioner held that "(1) but for the disruptions caused by the COVID-19 pandemic to both demand and supply, the market share shift observed in 2020 is not likely to have occurred; (2) despite consistent price underselling by subject imports, there were no adverse price effects on the U.S. prices of the domestic like product; and (3) the deterioration in the financial performance of the domestic industry, which remained at a healthy rate of profitability, was driven by declining domestic production that led to higher unit direct labor and unit 'other factory costs' even as the gross values of those costs declined."

The commission never found price suppression, the complaint said. Rather, all the commission noted was that the imports undersold the domestic like product "leading to lost sales and market share." But in making this determination, the commission rejected the econometric analysis provided by the investigation's respondents, which said that the pricing data was flawed since it reflected brand mix that merely constructed the appearance of underselling since certain firms can sell indistinguishable tires at a wide range of price points.

The COVID-19 pandemic, meanwhile, led to the domestic industry's declining performance in 2020, the complaint said. The commission failed to properly take into account the effect of the pandemic, "which severed the causal link between increased subject imports and any harm experienced by the domestic industry," the complaint said.