Cornerstone Research experts evaluated whether a reduction in tire imports from China would have an impact on the production of U.S. domestically produced tires.
Cornerstone Research was retained by counsel of a major importer in connection with the U.S. International Trade Commission’s (ITC’s) investigation of certain passenger vehicle tires and light truck tires from China. Dr. Kivanç Kirgiz and Dr. Emre Uyar of Cornerstone Research analyzed the competition between domestically produced tires and those imported from China. The experts addressed whether antidumping and countervailing duties on subject imports are likely to lead to an increase in domestic production.
Drs. Kirgiz and Uyar found that there was a high degree of product differentiation. They concluded that a reduction in imports of tires from China would be unlikely to lead to an increase in the volume of domestically produced tires. Instead, imports from other countries, which are closer substitutes for Chinese tires, would increase to fill the gap.
Drs. Kirgiz and Uyar showed that imposing duties did not result in a statistically significant increase in U.S. domestic tire production.
Drs. Kirgiz and Uyar provided empirical evidence using the “natural experiment” of safeguard duties placed on tires imported from China in 2009 under Section 421 of the Trade Act of 1974.
Their regression analysis showed that Section 421 duties resulted in a statistically significant decline in imports from China and a statistically significant increase in tire imports from other countries. At the same time, there was no statistically significant increase in domestic production.