The developing dispute over US tariffs of Chinese-made tires is likely to drive prices higher for Americans as Chinese tire producers appeal for a collective price hike to soften the blow from the recently approved tax.
Chinese tire exporters are also urging the government to offer higher tax rebates, said Zhou Zhiyong, general manager of China's eccentric shafts largest tire exporter Guangzhou Huanan Rubber Tire Co Ltd.
"Chinese tire producers have reached a consensus that we are going to raise the price on tire exports to the US by large margins," stainless steel pin Zhou told Guangzhou Daily. He added that the move would make American consumers feel the pain caused by the new tariff.
Zhou's tone may sound retaliatory, but according to Zhang Zhichao, analyst of the rubber industry with China International Futures Co, Chinese tire producers are in a dire need to raise prices to keep their businesses profitable after the tariff takes effect.
"The rising rubber prices in the international market as well as the new tariff would greatly lower (Chinese tire producers') profit margin, so they need this price hike even though that may lead to a drop in sales in the US market," Zhang said.
Wang Guomei, director of overseas marketing for Shandong Linglong Rubber Co Ltd, sold her company's low-end tires for $30 to US importers. She said prices will jump to $40 when the tariff is raised to 35 percent.
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