Special Security Case and Canton Fair Trade
At this session of the Canton Fair, due to the impact of the special security case, Chinese tire companies generally fell into stagnation in their exports to the United States. However, the reporter learned from the interview that Chinese companies did not "stand still", but tried to alleviate it by opening up new markets and new products.
However, relevant experts pointed out that while China’s tire industry is actively relieving the current difficulties, it must be highly vigilant that a new round of trade frictions will be triggered by the concentration of many companies and their low-cost release due to the “stuck†production capacity of the special security case. The entire industry caused greater impact and losses.
Basic stagnation of the US market
At the 106th Canton Fair, Sun Shumin, director of the International Market Service Department of Shandong Triangle Tire Co., Ltd., which accounts for nearly one-third of its total exports, said that following the implementation of the so-called “punitive tariff†in the United States, companies The export volume of tires has dropped from more than 300,000 monthly averages to more than 100,000.
Triangle tires are just a microcosm --- In April this year, the United States launched a special security investigation on Chinese tires, involving a total amount of about 2.2 billion US dollars. In September, the U.S. government decided to impose a three-year punitive tariff on China's imported tires, the first year's tax rate. It reaches 35%.
The reporter learned from participating in the Canton Fair tire companies that since the United States is the largest market for tire exports in China, after the special case of protection, related companies in China have been affected to a considerable extent, and the US local market has also been severely damaged.
Sun Shumin said that because there are no alternative products in the short term, the current US market is more like a "stagnation." Taking this company as an example, there are still some US customers who have not given up, but rather they are willing to cut their own profit margins, but also to keep the market share of the brand of triangular tires.
However, companies generally report that Chinese companies have been unable to obtain any new orders from the United States because of the special security case. Wang Guomei, director of Overseas Marketing Department of Shandong Linglong Tyre Co., Ltd., said that currently American sellers have stockpiled a batch of stocks on the one hand, and on the other hand they are also watching consumers accept price increases. After a period of observation, the U.S. market will consider whether or not to place orders for China's tires and how much will be placed after comprehensive laws, costs, and other factors.
Tire companies turn to domestic demand and emerging markets
Although faced with the difficulties caused by the special security case, in this session of the Canton Fair, China’s tire companies have basically demonstrated a more positive and mature response attitude: People have not simply waited for feedback from the US market, but have shifted direction. Focus on breakthroughs in emerging markets to compensate for the losses caused by the special security case as soon as possible.
Sun Shumin said that although triangular tires were affected by trade protectionism and orders have been reduced, they have not fallen to zero. This is because companies have implemented product diversification and market diversification strategies, continuously optimize product mix, improve product quality, and strive to maintain The customer is stable.
He said: "We are the West is not bright Dongfang Liang, triangle tires began to transfer to the Middle East, Africa, Latin America and other markets."
Wang Guomei said that from another perspective, the special security case even helped companies "force" a new world. She said that in order to meet the needs of the U.S. market, in the past, it was often necessary to reduce the supply to other markets. “Now, companies have transferred production capacity released after U.S. customers postpone or cancel orders to Latin America, the Middle East, and other regions. It is expected to achieve the 20% growth target."
Concerned about the release of tire production capacity and trigger a new round of trade friction
While enterprises actively strive to open up markets, how to avoid companies rushing to digest production capacity and causing products to dump certain markets at a low price and trigger a new round of trade disputes and frictions has become a problem that many market participants are worried about.
In the Canton Fair, some companies reflected that China’s tire production capacity has now targeted the Middle East, Latin America and other places. However, the export prospects of these regions are not very clear. Considering that India has just cancelled the special security investigation on China’s tires, it is true. There are trade frictions and the possibility of further spread of the dispute.
In addition, companies have introduced that the current competitive advantage of Chinese tires is still mainly reflected in the price, although the quality is also good, but compared with foreign brands, there is a certain gap, in order to fully release the US market more than 2 billion US dollars of production capacity Going out, there is indeed the possibility of triggering low-price competition and further leading to trade disputes.
Some experts suggested that at the same time when the special security case is being dealt with, China’s relevant departments and trade associations should also strengthen coordination and guidance, and actively guide China’s enterprises to transfer, release, and release production capacity in a rational, gradual and orderly manner, so as to avoid “precursorsâ€. Tiger encounters the embarrassing situation.
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