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Impact of USITC probe marginal to tire makers

TAIPEI, Taiwan -- Operations of Taiwanese tire makers will not be adversely impacted by the U.S. duties probe into tires imported from China since those companies can diffuse risk by allocating orders to factories elsewhere, local media said.

The United States International Trade Commission (USITC) on Wednesday vote to continue to conduct its investigations on imports of certain passenger vehicle and light truck tires from China. Its preliminary findings will be due around August 27, while its antidumping findings due around November 10.

The likelihood that the USITC could decide to impose anti-dumping and import duties on certain passenger vehicle and light truck tires from China has raised concern about impact on the operations of Taiwanese tire makers with factories in China.

Taiwanese tire makers, including Cheng Shin Tire (正新輪胎), Hwa Fong Rubber (華豐橡膠), Nankang Rubber Tire Corp. (南港輪胎), and Kenda Tires (建大輪胎), categorically dismissed the market's concern. Companies said that they can largely reduce the risk by leveraging their factories in Taiwan and Southeast Asia nations.

If the U.S. ultimately decides to impose anti-dumping and import duties, Cheng Shin said it will transfer some orders from Kunshan Plant in China to its factories in Changhua, Douliu of Yunlin County, as well as Thailand.

Hwa Fong Rubber, Federal Corp. (泰豐輪胎) and Nankang said they are keeping close watch on USITC's probe while gearing up for the production transfer.

Judging from previous experience, Kenda expects the reports of USITC's probe to trigger upswing in Kenda's tire price and shipments to the U.S.. Brokerages even projected that the U.S. market revenues of some Taiwanese tire makers will grow by 10-20 percent if the U.S. decides to impose anti-dumping and other duties on the tires mentioned above.

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