by Dino Maggioni, CEO of the Marangoni Group

Many people have approached me with amazement to ask me this question: “What are you getting up to in the USA?” I saw Marangoni’s name on some major American newspapers…” Yet, their amazement is understandable, since it is not so common for an Italian multinational company to become involved in a national debate overseas.

The issue raised in the media concerns the import from China of new tyres for trucks and buses, and the “dumping” that threatens to bring an entire industry to its knees, i.e. that of retreading, of which Marangoni is a leading company also in the USA.

What does “dumping” mean in this specific context? It means that many Chinese tyre manufacturers, who have been granted subsidies and contributions for investments by the governments of the Chinese provinces, are now able to export low-quality tyres to the USA (and Europe) at “non-market” prices, also thanks to their low-cost products (with a poorer performance and durability).

In the USA, Marangoni is one the leading independent manufacturers of tyre retreading materials. Every year, Marangoni’s RINGTREAD tread rings manufactured in the factory in Nashville are used by dozens of companies across North America for the retreading of hundreds of thousands of tyres. For Marangoni, a leader also in the USA in the so-called “circular economy”, and for many other American companies active in the retreading industry, “dumping” is an unfair trade practice, which is putting thousands of jobs at stake in the sector. In fact, we are talking about an industry chain that relies on labour spread out across the territory, to an extent that, in the USA, the retreading sector employs more than 60,000 people.

These are the reasons behind the uproar generated by the “Retread Instead” campaign launched by Marangoni, which was the leading proponent of a collection of signatures with the aim of urging the US Administration to reintroduce duties on Chinese imports. In fact, last February, the US International Trade Commission (ITC) had decided not to confirm this measure, expressing itself against the opinion that it had previously expressed and approved.
www.retreadinstead.net

We are well aware that the USA is sensitive, on the one hand, to free enterprise and trade and, on the other hand, to production “Made in America”. And Marangoni, by promoting a campaign based on these fundamental principles, has immediately gained national fame.

Our petition asked President Trump to intervene in order to complete the composition of the United States International Trade Commission following the resignation of one of its members, Dean Pinkert. His absence certainly affected the final resolution (3-2 against customs duties). If Pinkert, before leaving his post in the Commission, had voted as he had already done on several other occasions on the same issue, that is, in favour of “anti-dumping” import tariffs, the result would have been equal and this would have meant that the duties were confirmed.

While Marangoni’s initiative was being launched, a first important result was achieved: last week, President Donald Trump announced his intention to replace the resigning member of the Commission with Jason Kearns, a lawyer specialising in international trade law. This decision, if not directly attributable to our petition, nevertheless unlocks a deadlock and gives an answer to the reasons of our battle and to the great debate that has arisen in the US in the last few weeks on the issues that Marangoni has advocated by siding openly, as it is not influenced by other economic goals.

We are already certain of one thing: we have started a debate that has attracted the attention of the media, uniting several companies and prodding the US Administration into coming to a decision. We will therefore continue pressuring until the Commission has reviewed its position.

To collect the signatures we used the “We the People” platform, conceived and set up by former President Obama in 2011, which has been kept by his successor. If a petition collects enough signatures, it receives a direct answer. The relevant regulation, updated in January 2013, requires a petition to reach 150 signatures within 30 days to be included in the search portal on WhiteHouse.gov: if it reaches 100,000 signatures within 30 days, it has the right to get an answer. However, it is sufficient for a petition to be signed by only a few hundred people for its case to be taken into consideration.

The petition launched by Marangoni totalled 1,500 signatures, which are considered “weighty”, since they come from a primary sector in the US economy.

To quickly sum up the recent history, in the summer of 2016 (28th June), another institution, the Department of Commerce – DOC – had given the green light to apply import duties for truck and bus tyres up to 23.38%. On 29th August last year, the DOC then introduced additional anti-subsidy duties (to be added to the previous resolutions) for at least 20%. On 12 October, the DOC admitted having calculated badly the previous anti-subsidy duties, and that the new correct level was of at least 30% (an increase of 10 percentage points). In short, in October 2016, Chinese tyres were subject to at least 53.38% of total customs duties (import and anti-subsidy).

Until, as mentioned earlier, on 22nd February this year, the International Trade Commission contradicted the previous resolutions and eliminated import duties for truck and bus tyres. The decision, which came out of the blue, was a tough blow for those who have fought to protect the industry and local employment. The chairman of the United Steelworkers trade union, Leo Gerard, shared a very strong opinion: “ITC commissioners – he said – have made a huge mistake by deciding that imported tyres do not negatively affect US manufacturers. While the Department of Commerce has found subsidies for over 60% and dumping rates up to almost 23%, the ITC has failed to support US workers. This decision simply ignores the facts and the damage that Chinese exports are unfairly causing to the workers.”

If, thanks to this initiative, we have achieved a great media impact and strengthened a debate that echoed until it reached the White House in the USA, what is happening now in Europe?

In Europe, the market situation is quite similar and can be compared to that of the USA: new Chinese tyres for trucks and buses are imported and sold at “non-market” prices thanks to the same domestic subsidy mechanisms, low-cost policies and poor final product quality.

Despite this very critical situation, in Europe no customs duties of any kind are applied to imports of Chinese tyres for trucks and buses.

All this proves how much still needs to be done, on both sides of the ocean, to allow a development model to gain popularity, which combines sustainability and profit, attention to resources (environmental, economic, human, etc.) and employment.

A different degree of inattention has been shown until now by the new US Presidency and by the European Community, which also underestimates the consequences that the oldest, most polluting and costly “linear” economy model continues to have on many companies, on whole economic sectors and, especially, on our lifestyles. This is why, for us, this is a battle for progress that is still worth fighting for.

Dino Maggioni

Rovereto, 07.10.2017