The additional duties on tyres from China levied by the International Trade Administration Commission will be devastating for South African motorists, public transport users and the trucking and logistics sector, fostering higher prices and less choice, industry pundits said.
THE ADDITIONAL duties on tyres from China levied by the International Trade Administration Commission (Itac) will be devastating for South African motorists, public transport users and the trucking and logistics sector, fostering higher prices and less choice, industry pundits said.
The provisional payments on the respective tariff classifications that will be in place for a period of six months, from September 9 to March 8, 2023, are 38.33% ad valorem.
The Road Freight Association (RFA) and the Tyre Importers Association of South Africa (Tiasa) said on Friday that the additional duties, on top of the import duties that currently exist, of between 25% and 30%, were simply another form of tax on the consumer and on businesses. This left them to wonder if Itac and the Department of Trade, Industry and Competition had not properly considered the impact this would have on the cost of goods, transport and on inflation.
According to the latest data, China accounts for 59% of the imports of passenger tyres, 66% for truck and bus tyres and 61% overall.
RFA CEO Gavin Kelly said a 38.8% increase on the price of tyres will impact on the operational costs of transport, driving the price of the transportation of goods up by at least 8% leading consumers to pay more for goods, including the basic basket of everyday food, transport and medicines.
The RFA said that adding the anti-dumping levy, to the normal 5.9% increase in tyre prices, effected in July, translated to a 44.7% hike in a single year, which was untenable for any transport operation – whether moving freight or passengers – and would see increases inevitably being passed on to consumers.
“This will affect people when they go out to buy tyres, they will not have a cheaper option anymore. Why shouldn’t the levy have applied across all points origin like the US, Germany and Japan, the question is why is there protectionism against China,” he said.
Together with other transport-related organisations and associations, the RFA had earlier engaged with the Department of Trade, Industry and Competition – and bodies involved in the retail and wholesale tyre sectors – to gain clarity on why these anti-dumping duties would be implemented, given the inability of the local manufacturing industry to meet local consumption demands, as well as to ascertain how the local manufacturing industry would be adversely affected. Tyres are imported from various markets – precisely because South Africa does not have the capacity to meet local consumption.
Charl de Villiers, the chairperson of Tiasa, said under any normal economic circumstance, this increase would be a shock for tyre users, but introducing a pricing bombshell like this into the current inflationary environment was going to be devastating for South Africans. This decision by the government is unfathomable,” said De Villiers.
Last month Tiasa announced it had launched a double-pronged court bid as it opposes the application by South African Tyre Manufacturers Conference (Satmc) to tax authorities to impose an anti-dumping duty on Chinese imports.
Tiasa said it had applied to court to compel Itac and Satmc to disclose critical information being withheld with respect to Satmc’s application for the imposition of anti-dumping duties on imported tyres. In addition to challenging the manner in which the Itac is conducting the investigation.
Nduduzo Chala, the CEO of Satmc, which includes Continental, Bridgestone, Goodyear and Sumitomo, said though this was a preliminary determination, it was a big step in levelling the playing field for the local industry, which sustained 6,000 jobs and created about 19,000 indirect employment down the value chain.
– BUSINESS REPORT
