The importation of tyres in South Africa has been a subject of concern for local manufacturers, government authorities and industry representatives who have all recently criticized the importation of tyres into South Africa at extremely low rates that domestic manufacturers are unable to compete with. Dumping, the act of exporting goods to another country at prices lower than the ordinary value, often leads to unfair competition, harm to local industries and in this case, a road safety concern to consumers.
To address this issue, the South African government has implemented various measures, including the imposition of anti-dumping duties. Anti-dumping duties are taxes imposed on imported goods to counteract the effects of dumping. The imposition of these duties makes imported goods more expensive, thus providing some protection for local industries.
In recent years, the South African tyre industry has experienced an influx of imported tyres from countries such as China, India, and Thailand. Imported tyres are often sold at significantly lower prices compared to locally produced tyres, which negatively affects the local tyre industry. According to a report by the South African Tyre Manufacturing Conference (“SATMC”), the tyre industry contributes over R40 billion to the country’s gross domestic product and provides employment to more than 8,000 people. Thus, the threat posed by the dumping of tyres cannot be overstated.
To combat the issue of dumping, the South African government has put in place measures such as the International Trade Administration Commission (“ITAC”), which is responsible for administering trade policies, including the imposition of anti-dumping duties. In 2016, ITAC initiated an investigation into the importation of passenger car and light commercial vehicle tyres from China. The investigation revealed that Chinese companies were exporting these tyres at prices lower than the normal value, which resulted in material injury to the South African tyre industry. As a result, ITAC imposed an anti-dumping duty on these imports ranging from 3.33% to 77.15%.
Similarly, in 2019, ITAC conducted an investigation into the importation of truck and bus tyres from China and India. The investigation revealed that the imports were being sold at prices below ordinary value, which resulted in material injury to the local tyre industry. In response, ITAC imposed an anti-dumping duty ranging from 26.93% to 57.06% on these imports.
Further, in 2021, the SATMC applied to ITAC for relief against the dumping of tyres by China. The initial investigation conducted by ITAC found that dumping had indeed occurred and it consequently imposed a preliminary antidumping duty of 38.33% on any dumped truck, bus, passenger and car tyres as of September 2022 and until March 2023.
It is worth noting that the imposition of anti-dumping duties has additional effects on the local tyre importation industry and can increase the cost of living for consumers. Local tyre importers have consequently widely criticized the tariff hikes and the Tyre Importers Association of South Africa has similarly warned that the increases in duties will impose large constraints on already financially strapped consumers. Notwithstanding these issues, a strong case can be made that anti-dumping duties are a necessary measure to protect local industries and to prevent them from being forced out of the market.