Cooper Tire & Rubber Co posted 40 percent growth in passenger car tire sales in China in the first half from a year earlier and said a potential punitive duty on Chinese-made tires by the United States would have a mixed impact on its operations.

The sales growth beat its 35 percent target and follows a poor fourth quarter last year, Chairman and Chief Executive Roy Armes said. Sales of truck and bus tires, accounting for 65 percent of its China business, grew in double digits in the first half.

"The Chinese government's stimulus package has helped our business, particularly in the transportation area where we compete," Armes said last Thursday.

The US-based tire maker generated more than a fifth of its revenue in China and has two plants here. Armes expects China sales to reach US$1 billion including domestic sales and exports or 25 percent of global sales, in three to five years from the current US$700 million to US$750 million a year.

He added the US tire market could still drop this year but rebound 3 to 4 percent next year due to pent-up demand.

Armes said a proposal to impose punitive duties of up to 55 percent on imports of Chinese tires could be positive for the US tire industry in the short term but would hurt Cooper's investments in China as some of its products are shipped to its home turf.

China has sent a deputy commerce minister to Washington to lobby against the proposal, calling it a violation of World Trade Organization free-trade principles. The Obama administration has until September to decide whether to levy the duties.

The union that brought the case, the United Steelworkers, said rising Chinese tire exports to the US are hurting American producers.

Asked about the trade dispute, Armes said: "We realize that we have to compete on a global basis. To have free fair trade allows the markets to grow and to be successful."

(Shanghai Daily August 25, 2009)