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Steep tariffs force tire makers to halt exports to Turkey
Indonesian tire manufacturers stopped exporting bicycle and motorcycle products to Turkey in August after the government there introduced steep tariffs, as part of what it called an anti-dumping measure
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ndonesian tire manufacturers stopped exporting bicycle and motorcycle products to Turkey in August after the government there introduced steep tariffs, as part of what it called an anti-dumping measure.
“For the next year we will not be exporting tires to Turkey. There’s nothing we can do for the time being … as the decision (on high tariffs) has already been made,” the chairman of the Indonesian Tire Association (APBI), Azis Pane, said in an interview last week.
He said however that it would be nearly impossible for the Indonesian tire industry to completely abandon the Turkish market, which has risen since its beginnings in 1997 to become the second-largest destination for Indonesian bicycle and motor-cycle tires.
“Unlike Turkey, which needs small tires for motorcycles, other countries require larger ones for different vehicles. Our export market is not there,” Azis said, outlining one of the difficulties with leaving the Turkish market.
Last year, while domestic sales of bike and motorcycle tires eclipsed 23 million units, global exports were a mere 370,000 units, the bulk sent to other Asian countries.
However, data from the APBI shows that between January and July this year, the export of tires and tubes soared to 665,400 units and 518,000 units, respectively.
Since Aug. 1, the Turkish government officially imposed steep tariffs of between 5 and 10 percent on
bicycle tires and 20 percent and 32 percent on motorcycle tires imported from Indonesia, on dumping
allegation.
The tariffs apply to Indonesian tire producers PT Industri Karet Deli, PT Hung A Indonesia, PT Surabaya Kencana Tyre Industry and PT IRC INOAC Indonesia.
Dumping is where an export manufacturer sells products to a country at prices lower than they can be offered domestically in that country, while anti-dumping measures — generally additional import duties — are enforced in an attempt to increase competition and drive up local markets.
Azis said the increased tariffs had caused the local Indonesian industry to miss out an estimated US$40 million in sales targets this year, which would have doubled the value of last year’s exports.
He said he was “shocked” about the Turkish government’s decision, because “suddenly, our exports
were charged with higher tariffs that related to dumping and had been in effect since Aug. 1, but the [Indonesian] government did not inform us immediately about this”, he said.
He said the Indonesian tire manufacturers had repeatedly denied the allegation.
Indonesia’s tire exporters were the “envy” of the global tire industry, Azis said, because the country’s sales to Turkey had been steadily rising at a rate of 10 percent per annum.
Importers in Turkey, he alleged, had lobbied the Turkish tire industry to demand the government enforce punitive import duties on Indonesian products.
Current director for trade defense, Ernawati, said the only chance left for Indonesian tire producers was to request the Turkish government for an annual review next year.
“But that will depend on the Turkish government and whether it will have one or not,” she said.
