Bridgestone expects increased competition after the US imposed 25% punitive duty against Chinese tires expired September 26th.
The end of tariffs means that for the first time in three years Chinese manufacturers will be able to compete an a level playing field in the U.S. Since 2009 President Obama has been imposing tariffs on $1.8 billion of Chinese auto tires, under the complaint that increasing imports affect the economy and push U.S. factory workers out of jobs.
“With the tariff gone, Chinese tiremakers will be able to increase exports to the U.S.,” said Lee Sang Hyun, an automotive analyst at NH Investment & Securities Co. in Seoul. “This, in turn, will ease the hyper competitiveness in the Chinese market.”
With the punitive duties ended, overseas sales will increase dramatically. Analysts expect exports to the US to reach 70%, a level last seen in 2008. But Li Zhongxing, vice general manager at Qingdao Segrift International Logistics said that the end of tariffs is ‘bullish’ as the majority of tire plants are currently running at full capacity to deal with the domestic demand, which limits their ability to increase production for exports.
“There will be an impact on the entire market,” Kawasoe at Bridgestone said. “We will work to boost efficiency and cut costs to maintain competitiveness.”