The International Trade Administration Commission of South Africa (ITAC) has until 29 July 2023 to complete its investigation into whether Chinese tyres imported into South Africa constitute dumping and harming local manufacturers. However, the sooner ITAC and the minister finalise the matter, the better for the tyre industry. Whether or not duties are imposed, finalising the investigation will bring certainty to the industry.
This is the opinion of Meluleki Nzimande, Partner at Webber Wentzel, who says that while importers may be rejoicing at the news that the 38.33% provisional duties imposed on eight sizes of tyres imported from China in September 2022 have lapsed, this may be only a temporary reprieve.
Giving background to the issue, Nzimande says that the provisional duties affected tyres for cars, buses and trucks imported into the Southern African Customs Union (SACU). They were imposed for six months pursuant to ITAC’s decision to protect the SACU industry from harm while the anti-dumping investigation is on-going.
The South African Tyre Manufacturers’ Conference (SATMC), representing Continental, Bridgestone, Goodyear and Sumitomo, applied to ITAC for anti-dumping duties to be imposed, alleging that prices at which tyres were being imported from China constituted dumping and that this was causing harm to the SACU industry, including putting 6 000 jobs in local tyre manufacturing at risk.
“The Road Freight Association and National Taxi Alliance were, however, unhappy about the effect of the provisional duties on their operating costs,” says Nzimande.
In terms of the Anti-Dumping Regulations, ITAC has a maximum of 18 months to complete the full investigation. This period expires on 29 July 2023. It is understood that its investigation is at an advanced stage.
Nzimande points out that because the provisional anti-dumping duty expired prior to the imposition of definitive anti-dumping duty, importers of these tyres who imported and paid provisional duties may apply to SARS for a refund of duties paid.
“Despite the expiry of the provisional measures, if ITAC finds that that the dumped imports caused or threatened to cause material injury to the SACU industry, it may decide to recommend the imposition of a definitive duty on those tyre imports. Definitive duties would have to be implemented before 29 July 2023. If they are not, there will be no scope to introduce protective duties later to assist the SACU tyre manufacturing industry,” he says.