Sri Lanka tyre makers targeted in ‘dumping’ case

ECONOMYNEXT – Sri Lanka’s off-the-road (OTR) tyre makers have been targeted in an ‘anti-dumping’ case by a protectionist US manufacturer who wants to block cheaper imports.

"Too many domestic industries have been overwhelmed with unfair trade practices that capture sales of U.S. companies, depressed prices, reduced profitability and inability to maintain facilities and jobs," Titan International Incorporated said in a statement.

"Titan has been fighting for the last eight years to safeguard the rights of U.S. producers of certain OTR tires and their workers to conditions of fair trade."

In Sri Lanka protectionist businesses business lobbies including in ceramic, steel and school children’s shoes often make such claims to overprice products with the help of import duties and gouge customers unfairly with government controls.

Sri Lanka’s Ceramic and Glass lobby in particular has been pushing the government to enact ‘anti-dumping’ legislation, as public anger against their protectionist taxes which is pushing up the cost of building materials insteel and toilets to the homeless are growing.

As domestic salaries and costs grow the manufacture of such tyres have spread from countries like the US and Japan to Sri Lanka, China and Vietnam.

Sri Lanka has become a major production centre for solid tyres in materials handling in particular and some firms are original equipment to US manufacturers including Caterpillar, helping them compete in the world market with Chinese and other equipment makers.

In the replacement market, Sri Lankan and other tyre exporters are helping US firms keep costs down, ultimately helping the US consumer as well as industries like the mining sector which is now seeing margins narrow.

The action of Titan, analyst say is a warning of how Sri Lankan domestic producers will use the proposed anti-dumping laws to gouge customers.

The US anti-dumping petition filed jointly with the United Steelworkers union alleges that Sri Lanka, India and China are using government subsidies to make cheap products. Some rubber tyres come mounted on steel wheels.

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The US steel industry has been among the most vocal protectionists and has kept steel prices high, ultimately hurting the competitiveness of US steel-based end manufacturers.

Donald Boudreaux, a professor at George Mason University explains that US producers are spending lavishly anti-dumping and countervailing duties are the new face of corporate cronyism in the US while charging that Chinese firms are running losses to win customers in the US.

"In fact, though, the only wrongful spending is being done by the American steel producers," he wrote in a letter to a newspaper.

"Chinese producers merely offer their steel to consumers at low prices – offers that consumers are free to accept or reject.

"American steel producers, in contrast, demand that government force consumers to pay higher prices for steel.

"So if there is any economically unjustified and wrongful act here that should be discouraged with punitive taxation, it is the American steel producers’ gluttonous and wasteful pleading for special privileges."

Anti-dumping and import duties that push prices up, directly contradict government price controls and anti-trust laws.

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