Titan International and USW Call for Restrictions on Products Made from Russian Petroleum Inputs

Titan International (NYSE: TWI) and the United Steelworkers (USW) have urged the U.S. government to impose restrictions on imports of off-the-road (OTR) tires made from Russian petroleum products.

Rhea-AI Summary

Titan International (NYSE: TWI) and the United Steelworkers (USW) have urged the U.S. government to impose restrictions on imports of off-the-road (OTR) tires made from Russian petroleum products. With OTR tire imports from India surging nearly 38% in 2022, Titan's CEO, Paul Reitz, highlighted the threat posed by these imports, as they undermine the effectiveness of the U.S. sanctions against Russian oil. The joint letter to President Biden emphasizes that these measures are necessary to protect the U.S. tire industry and maintain national security. The call for action reflects concerns that Indian manufacturers are exploiting access to cheap Russian oil to undercut U.S. producers.

Positive

• Titan's advocacy for fair trade could strengthen its market position.
• U.S. government's potential import restrictions may protect domestic manufacturing.

Negative

• Rising imports of OTR tires from India threaten Titan's market share.
• Manufacturers accessing cheap Russian oil can underprice U.S. products.

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CHICAGO, Feb. 27, 2023 /PRNewswire/ -- Titan International, Inc. (NYSE: TWI) and United Steelworkers (USW) today called for restrictions on downstream products made from Russian petroleum inputs, citing in particular concerns over imports of off-the-road (OTR) tires from India. 

Paul Reitz, President and Chief Executive Officer of Titan International, stated, "Imports of Indian OTR tires increased by close to 38% in 2022 compared to 2021. India was not among the nations to ban imports of Russian oil products, including the production of the by-product, carbon black, which is a key ingredient the production of OTR tries. It is vital to our industry that we intensify our efforts to bring light to and close loopholes in the issued sanctions to Russia."

Titan and the USW sent the following joint letter to the White House:

President Joseph R. Biden, Jr.
The White House
1600 Pennsylvania Avenue, N.W.
Washington, DC 20500

Dear Mr. President,

We write on behalf of the domestic industry and its workers producing off-the-road tires (OTR tires) in the United States to alert you to serious concerns about imports of OTR tires from India that are undermining the integrity of our country's ban on imports of petroleum products from the Russian Federation. In order for these vitally important sanctions on Russian oil exports to have their intended effect, we urge you to take action to ensure that downstream products made in third countries from Russian petroleum products – such as OTR tires from India – are also subject to import restrictions.

As background, Titan International, Inc. is a leading manufacturer of OTR tires and wheels, which are used on a wide variety of off-the-road equipment, including in agriculture, mining, construction, and industrial applications. Titan operates six manufacturing facilities in the United States, in Des Moines, IA, Freeport, IL, Quincy, IL, Bryan, OH, Union City, TN, and Saltville, VA. Titan's workers are represented by the United Steelworkers union (USW), which, as you are well aware, is the largest industrial union in North America. We believe a thriving domestic OTR tire industry is vital to our ability to equip America's farmers and miners, as well as to support much-needed infrastructure construction and industrial applications. During the pandemic, our industry was deemed an essential industry, and Titan made significant investments to remain in operation and keep its workers safe so it could continue to serve its customers.

Unfortunately, Titan and the USW have experienced firsthand the injury that unfair foreign trade practices cause to domestic producers and workers. Titan and the USW have fought together for fair trade for many years, and we currently are defending antidumping and countervailing duty orders on OTR tires from India that were imposed in 2017.

In the last year, we have faced a new threat from Indian producers: their ability to leverage access to cheap, sanctioned Russian petroleum products to drive down tire prices and propel injurious exports to the United States. One of the key inputs to the production of OTR tires is carbon black, which is produced by combusting petroleum products. Thus, a country that is able to access plentiful supplies of low-priced oil will have a significant advantage in the market for OTR tires.

While we commend the Administration for bringing many of our allies together to implement bans on imports of Russian oil products similar to the ban we imposed in March of 2022 in response to Russian aggression in Ukraine, we note that India has not joined these efforts. To the contrary, India, the third largest oil importer in the world, has surged into one of Russia's top export destinations for petroleum products.¹ In 2022, Russia replaced Iraq as India's top source of oil imports, accounting for a quarter of India's total oil imports.² By December of 2022, India was importing more than a million barrels a day from Russia, more than any other country (including China).³ Indeed, India's oil imports from Russia in December of 2022 were 33 times higher than they had been a year earlier.⁴

During the same period in which India has ramped up imports of cheap Russian oil, Indian exports of OTR tires to the United States have grown rapidly. Since the U.S. ban was imposed in March of 2022, average monthly U.S. imports of OTR tires from India have jumped by 37.6 percent compared to the same period in 2021.⁵ In short, access to plentiful quantities of low-priced Russian oil has artificially lowered the costs of production for our Indian competitors and spurred a harmful flood of OTR tire imports. In our view, this not only directly harms U.S. producers and workers in an essential domestic industry – India's practices also undermine our national security. India's Russian oil imports weaken the effectiveness of the oil import ban and help fund Russia's war against Ukraine.

For all of these reasons, we respectfully request that your Administration consider imposing import restrictions on downstream products made in third countries with Russian petroleum inputs. These restrictions will help level the playing field for domestic producers of such products and their workers, such as Titan and the USW. More importantly, such restrictions will strengthen the integrity of existing sanctions on Russia and ensure the U.S. does not become an unwitting target for oil-dependent foreign goods made in countries that refuse to join the United States in banning Russian oil exports.

We would be pleased to provide further information to your staff and meet with them at their convenience to discuss these important issues.

Sincerely,                                    

______________________________ Paul G. Reitz CEO & President Titan International, Inc.

______________________________ Thomas M. Conway International President United Steelworkers

About Titan: Titan International, Inc. (NYSE: TWI) is a leading global manufacturer of off-highway wheels, tires, assemblies, and undercarriage products.  Headquartered in West Chicago, Illinois, the company globally produces a broad range of products to meet the specifications of original equipment manufacturers (OEMs) and aftermarket customers in the agricultural, earthmoving/construction, and consumer markets. For more information, visit www.titan-intl.com.

¹ See "India's Russian oil imports highest ever, makes up for 25% of all oil import," Hindustan Times (Jan. 15, 2023).
² See id.
³ See Charles Kennedy, "India's Oil Imports From Russia Jump 33 Times To Record High," OilPrice.com (Jan. 16, 2023).
⁴ See id.
⁵ U.S. imports for consumption of OTR tires from India, comparing imports from April through December of 2022 to the same period in 2021 under HTS 4011.20.1025, 4011.20.1035, 4011.20.5030, 4011.20.5050, 4011.61.0000, 4011.62.0000, 4011.63.0000, 4011.69.0090, 4011.92.0000, 4011.93.4000, 4011.93.8000, 4011.94.4000, and 4011.94.8000.

 

 

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SOURCE Titan International, Inc.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What did Titan International and USW request from the Biden administration on February 27, 2023?

They requested restrictions on imports of off-the-road (OTR) tires made from Russian petroleum inputs.

How much did OTR tire imports from India increase in 2022?

OTR tire imports from India increased by nearly 38% in 2022.

What are the implications of Indian OTR tire imports on U.S. producers?

These imports threaten the market share of U.S. producers like Titan International.

Why are Indian OTR tire producers able to offer lower prices?

They are leveraging access to cheap Russian petroleum products, which significantly lowers production costs.

What is the stock symbol for Titan International?

The stock symbol for Titan International is TWI.