The Extension Of The Trade War Is Fully Beneficial To The Tire Industry

- Mar 01, 2019-

The seventh round of China-US high-level economic and trade consultations officially ended yesterday. The Xinhua News Agency said that the two sides have further implemented the important consensus reached at the meeting between the two heads of state in Argentina, on specific issues such as technology transfer, intellectual property protection, and non-tariff barriers. Substantial progress has been made.

US President Trump announced on his Twitter account on the 24th that he will postpone the plan to increase China’s tariffs on US exports to the US on March 1. After more than two hours, he said to the media that if everything goes well, we are Some very important news will be released in the next week or two.

Some commentators said that the final consultation results have not yet been announced, and "substantial progress" does not mean that the trade war will be terminated, but the delay in the increase of tariffs is still a good news for Chinese companies. The buffer period for export commodities will be extended.

Some people in the industry said that the United States has always been an important place for Chinese enterprises to export. In 2017 alone, the total value of automobile tires (passenger tires and passenger tires) exported by Chinese manufacturers to the United States reached US$1.618 billion (approximately RMB 11.245 billion). The farther away from the implementation of the 25% tariff increase, the longer the “honeymoon period” of China’s tires and even the rubber industry.

For China's rubber industry, especially the tire industry, the impact of trade war is huge. Tire products are different from additives, carbon black and other products. Their own profit rate and added value are not high, and tariffs are imposed. This part of the cost is also difficult to pass to the downstream dealers. The cost that the company can save from the beginning of March 1 is huge.