The US Department of Commerce's new anti-dumping investigation on tyres exported from Thailand to the American market is believed to result from the US-China trade war, as some exporters are Chinese factories relocated to Thailand, says the Federation of Thai Industries (FTI).
The group on Wednesday expressed concerns about the move as it will further affect Thai industries, already reeling from the pandemic.
US authorities said in their latest announcement it is preparing to launch investigations on anti-dumping duties (AD) and countervailing duties (CVD) of imports of passenger vehicle and light truck (PVLT) tyres from South Korea, Taiwan, Vietnam and Thailand, following complaints from many American businesses.
AD and CVD probes are conducted on certain imported products suspected to be dumped at unusually low prices, or if exporters in foreign countries have been unfairly subsidised by their governments.
Thailand exports more than 20 million auto tyres overseas annually. The US is its largest market.
Kriangkrai Tiannukul, FTI vice-chairman, believes the latest probe is related to the trade war.
"The conflict has affected many businesses and companies based in China, so they relocated their facilities to other countries," he said.
Asean countries, including Thailand, were a major destination.
"The US is watching this movement and allegedly trying to use a trade barrier on Chinese products," Mr Kriangkrai said.
"Apparently this is part of a political conflict."
According to the US Department of Commerce, the AD investigation will focus on PVLT tyres from South Korea, Taiwan, Thailand and Vietnam it claims are being dumped in the US market at less than fair value.
The alleged dumping margins are between 106% and 218% for Thailand.
The 2019 imports of PVLT tyres from Thailand were valued at $1.96 billion.
Final determination by the Commerce Department is scheduled for Nov 9 following an investigation by various US agencies.
If the department determines a country was dumping tyres it will raise duties on the products.
"The strict enforcement of US trade law is a primary focus of the Trump administration," the department said in its press release.
The FTI said the US will start investigating this case on July 26 and those countries will be allowed to clarify their allegations.
The group said Thailand has 7-8 tyre factories, mostly located in the Eastern Economic Corridor.
Five of the factories moved from China to Thailand, and three of these primarily export tyres. The other two plan to begin exports soon.
The FTI said Chinese companies use Thailand as an export base for products ranging from tyres, processed food and other rubber products.
Mr Kriangkrai said the government should closely monitor the situation and prepare measures to respond to the US's anti-dumping allegations.