On December 30, 2020, the US Department of Commerce announced affirmative preliminary determinations in the antidumping duty (AD) investigations of passenger vehicle and light truck tires (passenger tires) from Thailand, Taiwan, South Korea and Vietnam. It preliminarily determined that exporters from such countries have dumped passenger tires in the US. Its final determinations in these cases are scheduled for mid-2021. In the meantime, importers of passenger tires from these nations are required to pay AD duties at the rate of 13.25-22.21 percent.
KResearch views that the AD duty rate imposed on Thailand will likely be lower than that preliminarily determined by the US, or some Thai companies might not even be accused of dumping their passenger tires in the US; however, in the worst case scenario, i.e., all Thai companies are subject to an AD duty, it is expected that Thailand will lose its competitiveness over the next 1-2 years when those companies will be making adjustments. In spite of this, KResearch views that Thai vehicle tires will remain competitive in the US when compared to locally-manufactured tires and even imports because their prices, in particular passenger vehicle tires, are relatively lower despite the AD duty. However, the competitiveness of Thai light truck tires in the US market might be threatened if they are subject to the AD duty.
Since the export costs of Thai vehicle tires are set to increase for more than half a year during 2021 while waiting for the US AD dumping investigation ruling, the overall exports of Thai vehicles tires will inevitably be affected. KResearch projects that the combined shipments of Thai passenger vehicle and light truck tires may reach only 18,500,000-19,200,000 million tires during 1H21, which would be lower than our export potential (if there is no US AD duty). Light truck tire exports will be more affected because the import prices from Thailand will likely be higher than its rivals, especially Indonesia, Vietnam and Canada.