MOTORING NEWS - Last Thursday, 8 September, the International Trade Administration Commission (Itac) announced the imposition of a new 38,33% provisional duty on tyres imported from China. 

This is on top of the import duties that currently exist, of between 25 and 30%. The latest duties will push overall duties on tyres close to the 70% mark.

Tyre Importers Association of SA (Tiasa) says this is a fresh blow to cash-strapped consumers, as it will materially impact the cost of transport, food and goods - and therefore general inflation. It is calling for the immediate reversal of this decision.

The provisional duties are effective immediately. Taxi operators will now pay 23% more for tyres, truck and logistics providers 22% more and passenger vehicle owners will now have to pay between 21% and 25% more.

Local manufacturers of tyres, Continental, Bridgestone, Goodyear and Sumitomo - collectively known as the South African Tyre Manufacturers Conference (SatMC) - applied to Itac for the imposition of substantial additional duties on passenger, taxi, bus and truck vehicle tyres imported from China.

Crippling impact
Charl de Villiers, chairperson of Tiasa, says it's not difficult to see how crippling the impact of these duties will be on consumers.

In late August, Stats SA released the latest consumer inflation figures, which showed that annual consumer inflation reached a 13-year high, increasing to 7,8% in July, from 7,4% in June. The average food basket, according to the Pietermaritzburg Economic Justice and Dignity Group, increased by 12,6% between August 2021 and August 2022, and Eskom's tariff increase for 2022 was at 9,61%.

According to StatsSA, those using public transport saw a 9% increase in July, pushing the annual increase to 16,4%. De Villiers says while there is some good news with this month's decrease in the petrol price, tyres are the third biggest input cost in transport, after wages and fuel, and the new duties will have a knock on effect.

"Government's rationale for the imposition of duties is ostensibly to help protect local manufacturers, but in the case of tyres, the local manufacturers themselves are having to import the vast majority (80%) of the over 3 000 different models of tyre ranges they sell. They have to do this because it is not cost- effective to set up production lines for that many models within one plant," he says.

Every job valuable
"SatMC members have said that they need the additional duties to protect jobs. According to them, they employ 6 000 direct workers and support 19 000 indirect jobs. Tiasa members, which are all South African wholesale companies, many of which have been in business for two or three generations, employ a collective 3 000 people directly, and support at least 55% of those 19 000 indirect jobs claimed by SatMC.

"The point is that every single job sustained in our country is valuable. The additional duties will push many of these companies out of business, destroy jobs, add an excruciating financial burden on every motorist in the country, every bus company, every taxi owner and every commuter.

"For too long now, trade policy decision makers have had a myopic view on tariffs and duty impositions without taking into consideration the broader economic landscape at the time of these applications, or the impact that it will have on our country's people. It is high time this changes," says De Villiers.

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