Fujian's two big tire giants or arrangements for "outward" response to the special security case


On September 11, Fujian’s two tire giants, Xiamen Zhengxin Tire and Fujian Jiatong Tire, came to the “US Tire Special Protection Case” announced by President Obama.

At present, the relevant domestic departments are involved in the emergency and the special security case still has some rotation. Xiamen Zhengxin and Fujian Jiatong have also been coping with “coups” to cope with, including the fight for tariff support and order relocation.

é—½ "Two giants" will be injured

According to the special safeguard case, starting from September 26 this year, the United States will impose a three-year punitive tariff on Chinese cars and light truck tires that are exported to the United States. The tax rate is 35% for the first year and 30% for the second year. The second year is 25%.

Since Bush Jr. had repeatedly vetoed similar special security cases at the last moment, this "bad news" made Xiamen Zhengxin's relevant staff feel a bit surprised.

Previously, Xiamen Zhengxin said that Xiamen Zhengxin, which is the mainstay of domestic sales, is not affected by the special security case because the volume of this piece of business to the United States is also several million US dollars a year. The staff member revealed yesterday that relevant senior officials are paying close attention to the development of the situation and discussing countermeasures.

According to the data disclosed by relevant officials of the Xiamen TDC, last year, the export of tires from Xiamen customs area to the United States was 12 million U.S. dollars. From January to August this year, there were only 6 million U.S. dollars. The overall security case has a direct impact on Xiamen.

However, Fujian Jiatong Tire Co., Ltd. in Putian is obviously more “sad”, and its staff revealed that the United States is one of the important markets for its export products. Last year, passenger cars and light truck tires in the US market accounted for about the entire year of the company. 1/4 of sales revenue.

“This special safeguard case definitely has an adverse effect on the future sales of Giti in the United States.” Staff said that the specific impact cannot be accurately estimated at present.

 

Business "relocation" may not be complete once and for all

The latest news shows that at present, a number of tire companies in China urgently went to Beijing to discuss countermeasures and hoped to receive tariff support.

At present, the tire tax rebate rate is 9%, and the standard natural rubber import tariff is 20%. Related associations and companies propose to raise the export tax rebate rate and reduce import tariffs.

In addition, due to the above-mentioned two Fujian companies in many countries and regions

With a factory, it is expected that the loss will be reduced through the “outward movement” of the business.

According to the media quoted the manager of Taiwan Zhengxin Rubber Industry Co., Ltd. as saying that due to the special security case, the company will transfer the production of passenger car and light truck tires from mainland China to factories in other countries and regions.

"Excluding labor costs, the production costs of all the company's production plants are basically at the same level; for example, the cost of labor costs for Taiwanese production plants that are more expensive than those of mainland factories is about 6%-8%." Management sources revealed.

Because the company has the ability to transfer orders to manufacturing plants such as Thailand, the 6%-8% cost increase is much lower than the high tariff of 35%, and the order transfer is obviously much better than the imposition of additional tariffs. Regarding this statement, the reporter tried to verify with Xiamen Zhengxin and Taiwan’s Zheng Xin’s relevant person yesterday and they have not received a positive response.

Coincidentally, the related parties of Giti's Shanghai sales headquarters also disclosed a similar strategy. “High-level officials are still discussing options, including moving some of their operations to Indonesian factories.”

In this regard, some experts analyzed whether the United States will judge other countries or regions in the future to make similar decisions difficult to judge, so “outward migration” may not necessarily get rid of this turmoil. “In addition, after the United States implemented special safeguard measures, other WTO members The country can no longer perform any procedures and implement the same measures directly on Chinese tires. This is undoubtedly a heavy blow to tire exports."

In addition, similar special security cases may also affect more areas. Therefore, the industry hopes that it is imperative that China and the United States conduct effective "re-negotiations."


View related topics: China and the United States tire special security case


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