Import of Chinese agricultural tires subject to new anti-dumping measures

Anti-dumping measures relating to imports of agricultural tires originating in China have been extended for up to five years. The act was materialized through Resolution GECEX 452/2023 (from the Executive Management Committee to the Chamber of Foreign Commerce). Values ​​range from US$345,37 to US$3.028,62 per ton, according to the table at the end of this article.

The measures cover new "rubber" tires for use on vehicles, implements, harvesters and agricultural or forestry machines, with diagonal construction, exported by China to Brazil.

In the opinions and studies that supported the decision, the technicians considered that "in the Chinese agricultural tire production sector, market economy conditions do not prevail". For this reason, the cost data presented were not considered appropriate for comparisons. The solution was to use the normal value calculated for the United States, under the terms of article 15 of China's Accession Protocol to the World Trade Organization (WTO).

There were several demonstrations by importers aiming to remove or relax the measures. For example, CNH Industrial Brasil Ltda maintained that "the investigated imports would have been internalized in the Brazilian market at prices much higher than those of the domestic industry in almost all periods under analysis".

In any case, the technicians concluded that imports without compensatory measures would be harmful to the national productive sector and the public interest.

To understand bias tires

Agricultural tires, in general, are classified into diagonal and radial.

Bias (conventional) tires have the ply cables extended to the beads. And they are oriented to form alternating angles, between 30 and 40 degrees in relation to the median line of the tread. They can be produced from natural rubber, synthetic rubber, black powder, chemicals, oil, silica, textile fibers and wire.

On the other hand, radials (not covered by the decision) are characterized by the application of different raw materials, such as the use of belts, which give them extra quality and performance compared to the diagonal tire. Its structure consists of one or more plies whose threads are arranged from bead to bead and placed at approximately 90 degrees in relation to the median line of the tread, this structure being circumferentially stabilized by two or more essentially inextensible straps.

About anti-dumping measures

Antidumping measures are part of a group of possibilities that countries have to react to foreign trade infringements. These, in turn, consist of anti-competitive actions that are potentially harmful to national production. They can characterize protectionism and unjustifiable privileges.

In Brazil, dumping is considered to be the introduction of goods into the domestic market at an "export price lower than their normal value" (Decree 8.058/13). In other words, the internalized product would be assigned a value that is incompatible with that considered internationally reasonable. The Brazilian legal text does not mention or condition the cause of this distortion. The fact is enough.

Although lower prices initially seem beneficial to consumers, they can cause several harms. Be it because of its origin; be it because of its consequences. For example, the product may arrive cheaper here due to the use of child or slave labor. Or because it is produced in a way that causes greater environmental degradation. In terms of consequences, one can mention the destruction of national production capacity and subsequent dependence on the supplier.

The difficulty of the matter is in separating the goods whose price is lower due to acceptable competitive gains from the others.

Once the practice of dumping is identified, countries usually charge extra amounts to allow the import of products. Its calculation starts from the dumping margin, which consists of the difference between the normal value of the good and its export price in a given period. From then on, a specific (fixed) or "ad valorem" rate is applied to the goods. The amounts collected become revenue originating from the Union.

Finally, do not confuse what has been presented so far with the practice of predatory prices in the domestic market. In this case, we are talking about a violation of the economic order, governed by another law and within the jurisdiction of the Administrative Council for Economic Defense (CADE).

Charged amounts

Pursuant to Resolution GECEX 452/2023, the application of the anti-dumping duty to Brazilian imports of diagonal construction agricultural tires originating in China implies a duty to collect the amounts specified below: