Hankook Tire is expected to return to the US market

Korea, China, and the United States have renewed their concern about tire protection. According to a communiqué issued by the World Trade Organization on May 24, 2011, China has notified the arbitration organization of the World Trade Organization that it has decided to appeal the panel decision of the Sino-U.S. tyre special safeguard measures in the WTO dispute case. This was after China’s World Trade Organization ruled on December 13, 2010 that China had lost the case in the China-US Tire Warranty Dispute. China appealed again.

Hankook Tire's Jiaxing plant, previously suffering from punitive tariffs in the United States, has an annual production capacity of about 16 million, of which 60% is domestically sold, and one-third of its exports are exported to the US market.

Whether or not the United States violates the rules of the World Trade Organization, both China and the United States have a foothold: The United States believes that from 2004 to 2008, the rapid increase in the number of Chinese tires imported into the United States has caused the US tire industry to be affected, so the sanctions are reasonable; and China Yao Jian, a spokesperson for the Ministry of Commerce spokesman, said after interviewed after losing the lawsuit in China last year that the US’s special safeguard measures were trade protectionist measures adopted to transfer domestic political pressure. Since the implementation of the special safeguard measures, the employment rate of the US tire industry has not risen. As a result, the practice has obviously violated regulations.

Industry insiders pointed out that since there were no precedents for the special safeguard measures, the interpretation of the relevant legal provisions was not clear, making the case into a “Rashomon” incident in which the parties involved believed that they were each reasonable and their opponents were unreasonable. Can China's tire companies return to the U.S. market through this “approach?” The interviewed experts believe that the appeal can exert pressure and warning on the U.S. and other countries that are preparing to emulate, and is therefore necessary.

In fact, after the occurrence of the tire special security case, Hankook made significant adjustments in its operations. All the tires produced by Hankook Tire's Jiaxing plant are passenger car tires. Now part of its production capacity has been transferred to South Korea, and the development of the domestic market has been increased. If China can “pull” a round at the World Trade Organization, it means that Hankook will return to the US market.

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