The European Commission has reaffirmed its stance on trade defence measures by extending countervailing and anti-dumping duties on imports of certain Chinese tyres. The decisions, outlined in Commission Implementing Regulations (EU) 2025/61 and 2025/58, follow expiry reviews assessing whether unfair trade practices continue to distort the EU market. The findings confirmed that Chinese manufacturers benefit from state subsidies and engage in dumping, justifying the continued enforcement of these protective measures.
Unfair Tyre Imports?
The countervailing duties, first introduced in 2018, were subject to an expiry review in August 2023 following a request from the Coalition Against Unfair Tyre Imports. The review sought to determine whether Chinese government support for tyre producers persisted and whether lifting the duties would harm EU manufacturers. Similarly, the anti-dumping duties, initially annulled following a legal challenge in 2022, were reinstated after a fresh investigation in 2023. An expiry review initiated in July 2023 found that dumping remained a significant concern despite reducing the volume of Chinese tyre imports.
The Commission engaged with various stakeholders throughout the investigation, including European tyre manufacturers and industry representatives. Companies such as Lapin Kumi Oy (Finland), RuLa-BRW GmbH (Germany), and Marangoni S.P.A (Italy) actively participated, along with two confidential EU producers. On the importer side, the Commission gathered data from only two sampled exporters, Giti Tire Group and Hankook Group.
Cooperation from Chinese authorities and financial institutions was notably absent. The Government of China (GOC) declined to respond to Commission questionnaires or facilitate the provision of financial data from state-backed banks. Of the 140 Chinese exporters identified in the complaint, only three engaged with the investigation, and only one EU importer expressed interest in the review process without submitting the required information.
We caught up with several industry partners to understand their thoughts, including the only two manufacturers participating in the EU study, Giti and Hankook. Ironically, neither of these are Chinese companies, but like most manufacturers across the globe, they have some manufacturing in China. We also contacted several Chinese-owned manufacturers ourselves to see if they would comment, as we wanted to give a balanced view. However, no comment was forthcoming despite our efforts. Finally, we spoke to a few retreaders to get their opinions on the situation and whether tariffs were the answer or whether the new legislation was a bit of a blunt tool to deal with a complex problem. Not everyone we spoke to has been quoted; some wished their comments to remain anonymous.
Continued Subsidisation and Market Impact
The review into countervailing duties revealed that Chinese manufacturers continue to receive financial advantages from the state, including preferential loans from both state-owned and private banks, access to low-cost credit, and tax exemptions. The tyre sector remains classified as an “encouraged industry” under China’s 14th Five-Year Plan and the “Made in China 2025” strategy, ensuring that export-oriented producers benefit from government support. Export credit insurance schemes further reinforce the ability of Chinese firms to undercut European competitors. This seems relatively straightforward. However, the issue, particularly regarding retreading, isn’t quite so cut and dry. Part of the problem is that companies can adapt quicker than governments can legislate. Commenting on whether tariffs work, Guy Heywood – Vice President Hankook Tire Europe GmbH, gave us a bit of a potted history of EU tariffs and their effects on the retreading industry:
“If we look at the history of the first tariff applied in 2018, we saw an immediate reduction in Truck and Bus tyre imports into the EU and a stabilisation of the retread markets in the EU. However, within a year, we saw the imported volumes and prices for imports recovering, with growth from Turkey, Russia, Thailand and, more recently, Vietnam. Today, with the tariffs in place for more than six years, we see non-EU TBR imports into Europe above the levels of 2017/2018. We see a 20% reduction in retread markets versus 2018, and import prices are around the same level as in 2017/2018. So, the tariff seemed to work for a period, but the volumes recovered because the affected manufacturers relocated their factories to countries where tariffs are not applied, or new manufacturers from non-tariff countries increased capacities and exports to the EU.”
Jorge Crespo, Managing Director of Vaculug, echoed this sentiment: “If you look at the numbers of retreads sold in Europe, from 2017 vs 2024, the number of retread truck tyres is 20% lower.” We also spoke to Chris Bloor, Executive Director, International Sales & Marketing－Giti Tire Group, the other contributor to the EU report, who stated: “Giti strongly supports retreading. We work with Vaculug in the UK and GIIB in Malaysia.” Giti also works with independent retreaders to develop casings that can be retreaded. They actively promote retreading to their fleet clients, as do Hankook, so, interestingly, only these two companies engaged with the EU study are already doing the right thing regarding new tyre development concerning retreading. If the tariffs support ‘anti-dumping’, then retreading should be a viable solution to fewer low-quality tyres being imported. However, the situation is more complex, and the retreading industry isn’t benefiting from these tariffs.
The European tyre industry operates within a three-tier market structure, with premium tyres occupying Tier 1, mid-range brands in Tier 2, and budget tyres in Tier 3. Chinese tyres are outlined in the report as predominantly competing in the lowest tier, where price is the primary purchasing factor. According to the report, the influx of low-cost imports continues to undermine EU manufacturers, particularly affecting the retreading sector, not necessarily due to price competition but because the retreading industry relies on access to high-quality casings. The review confirmed that the competitive pressure from Chinese imports is limiting the growth of the EU retreading industry, making it increasingly difficult for domestic firms to sustain operations. Most retreaders, however, will tell you that they don’t compete on price, and reputable manufacturers will make tyres specifically to be retreaded. Crespo outlined this well: “Quality of the product is critical. Vaculug never sacrifices the quality of the product. Our materials and production processes focus on delivering an exceptional product.” This end product can often compete for milage with Tier 1 and 2 tyres because the casings come from these tiers. So, in a way, the focus of tariffs on Tier 3 tyres will never help the retreading industry. Then, who’s benefiting and to what end?
Changing Import Trends in the European Market
While the EU has reaffirmed its trade defence measures, the broader tyre import landscape continues to evolve. The European Tyre & Rubber Manufacturers’ Association (ETRMA) reported that truck and bus tyre imports (EU27+UK) from outside Europe rose by 3% year over year in the first eleven months of 2024, 23% higher than in the same period of 2019.
Thailand remains the leading tyre exporter to Europe, though its import volumes and market share declined between January and November 2024 compared to the same period in 2023. Meanwhile, Vietnam has seen significant growth, with tyre import volumes increasing by over 25% yearly. In absolute terms, Vietnam’s imports have grown by 1.1 million units since 2019, solidifying its position as the second-largest supplier. The country has further widened its lead over China, which has only partially regained lost market share despite increased volumes. In contrast, Korea and Japan saw their share decline in 2024, while Egypt moved into fourth place among tyre exporters to Europe. Maybe a core part of the problem is because Europe is a developed Western economy – growing markets are challenging many industries because they’re learning to make the goods the world wants. The other side of the coin is growing cost bases in Europe. Retreading Business has spoken to several companies not mentioned here considering diversifying production away from Europe for several reasons, with cost indeed being among them, but secondly, bringing production closer to the raw materials and taking advantage of global supply chains. Europe has always held its position as a top manufacturing base. Still, most of the raw materials come from Southeast Asia, with Indonesia, Malaysia, and Thailand collectively making up the bulk of imported natural rubber. There’s a whiff of hypocrisy about putting tariffs on high-value end-products being imported but still wanting to bring in the natural resources to create the high-valued products yourselves and putting up barriers to entry for others. There’s also the question of non-EU imports from the ETRMA manufacturers.
As with anything to do with international trade, the conflicts and the resolutions are never one-sided and are always complex. Maybe it is too complex for a mechanism as clean-cut as tariffs. Trade sanctions and dumping duties may be blunt instruments. The evidence in the EU case has been noted by some parties as being relatively narrow, leading to what can be seen as purely punitive measures. On the flip side of this argument, Crespo, himself a CEO of a retreading company, defended some of the core reasons for tariffs: “The difference is the standards in manufacturing. The key is to get manufacturers to comply with local legislation. The aim is to avoid unfair competition.” He certainly has a point when it comes to continued dumping.
Evidence of Continued Dumping
The review concluded that lifting the anti-dumping measures would allow Chinese manufacturers to re-enter the market at artificially low prices, causing renewed injury to EU producers. As a result, the Commission opted to maintain the duties, which range from €0 to €35.74 per tyre. But we would ask, to what end? What is the end goal? Is it purely to protect European companies from outside competition or enact sustainable practices in the tyre industry? Some people we’ve spoken to suggest that there are many more ways to improve sustainability besides a flat additional fee on Chinese imports (which, as the report has shown, hasn’t stopped dumping practices).
Tariffs alone will not prevent the influx of low-cost and single-use tyres into the EU markets unless they extend to most Southeast Asian imports. In 2024, most European tyre imports originated from Vietnam, Thailand and Cambodia, where new and existing plants manufacture Chinese and local-brand tyres. These tyres are entering the market at import values comparable to those previously seen from China.
Even if tariffs were applied to Southeast Asian imports, low-cost tyres would still probably enter Europe from other regions, including Turkey, North Africa, and Russia, once the war ends. Additionally, Chinese manufacturers are establishing production facilities within Europe, such as Linglong in Serbia, while Indian manufacturers like Apollo have set up operations in Hungary. As a result, low-cost tyres produced within Europe will be available on the EU market, often priced below the average cost of a retreaded tyre.
In the long term, the only sustainable way to protect the retreading industry is to improve its promotion as a viable alternative to low-cost, single-use tyres. Demonstrating the value and benefits of retreading remains essential to ensuring its continued relevance and competitiveness in the market.
When speaking to Crespo, he echoed this sentiment: “If sustainability and the circular economy are genuine priorities, then regulation should support and encourage the use of retreaded tyres. Financial incentives, such as tax breaks or subsidies, could be used to encourage companies and fleets to adopt retreads.
“A logical starting point would be for governments to lead by example, implementing legislation requiring retreaded tyres in their own fleets. This would theoretically demonstrate the value and reliability of retreading, setting a precedent for the broader market.”
In 2002, the Italian government proposed that public fleets incorporate at least 20% retreaded tyres for their commercial and industrial vehicles. While discussing this with Crespo, he stated: “If this level of uptake were actually to be implemented across Europe, the impact on sustainability and resource efficiency would be significant.”
Is there an element of these tariffs that means that other, potentially more sustainable and practical solutions are being overlooked or not considered? In some EU countries, these decisions are purely left to business, and many consortiums of retreaders and recycling firms are fighting to try and enact more practical legislation locally. However, the general outlook isn’t a positive one.
Decisions and Cooperation Levels
Following the findings of both reviews, the European Commission confirmed the continuation of countervailing duties ranging from €3.75 to €57.28 per tyre, alongside the re-imposed anti-dumping duties. The measures aim to ensure fair competition within the European market and to prevent further damage to the EU tyre industry. The expiry reviews have reinforced the EU’s position that Chinese tyre manufacturers continue to benefit from unfair trade practices, including state subsidies and dumping. The Commission’s decision to uphold both countervailing and anti-dumping duties reflects the ongoing need to protect the EU industry from distortions in the market. However, the continued effect on the retreading is yet to be fully realised, and whether more complex solutions will be considered that could lead to an increase in both retread adoption and improved recycling is yet to be known. Many questions remain unanswered, and as a community, the retreading sector can only continue to educate and advocate for more sustainable practices. Crespo concluded: “Legislation has to be more inclusive, more focused on incentives. We could get there, but we’re going the long way round. Europe needs to lead by example, and it’s not about penalising; it’s about incentivising.”
