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SINGAPORE (Dow Jones)–Tire companies which have manufacturing facilities in several countries are shifting production meant for export to the U.S. out of China to avoid a stiff 35% tariff, industry executives said Tuesday.
This could result in stronger demand for natural rubber in countries such as Japan, they said.
The U.S. has imposed a special 35% import tariff on light grade tires manufactured in China that came into effect over the weekend.
“It makes sense for those companies which have multinational manufacturing facilities to shift production of tires meant for export to the U.S. out of China,” said a Beijing-based rubber industry executive.
Japan-based Toyo Tires has decided to stop production of U.S.-bound passenger and light truck tires in China. According to a company announcement, most of these U.S.-bound tires will now be manufactured in Japan.
A Toyo Tires executive contacted in Tokyo declined to divulge the volume of production to be shifted to Japan from China.
Source: Dow Jones