Concerning the initiation of the investigations into the alleged dumping and subsidizing of truck and bus tires originating in or exported from China.
Decision
Pursuant to subsection 31(1) of the Special Import Measures Act, the Canada Border Services Agency initiated investigations on August 17, 2026 respecting the alleged injurious dumping and subsidizing of truck and bus tires originating in or exported from the People’s Republic of China.
Summary
[1] On July 10, 2026, the Canada Border Services Agency (CBSA) received a written complaint from the Canadian Retread Manufacturers Association / Association Canadienne des Manufacturiers du Rechapage (the “CRMA”) and Michelin North America (Canada) Inc. (Michelin) (collectively, the “complainants”), alleging that imports of certain truck and bus tires (hereinafter, “TBT”) originating in or exported from the People’s Republic of China (“China” or “the subject country”), are being injuriously dumped and subsidized.
[2] On July 31, 2026, pursuant to paragraph 32(1)(a) of the Special Import Measures Act (SIMA), the CBSA informed the complainants that the complaint was properly documented. On August 11, 2026, the CBSA informed the Government of China that a properly documented complaint had been filed. At that time, the Government of China was provided with a non-confidential version of the subsidy complaint and was invited for consultations pursuant to Article 13.1 of the Agreement on Subsidies and Countervailing Measures, prior to the initiation of the subsidy investigation. The CBSA did not receive any request for consultations.
[3] The complainants provided evidence to support the allegations that certain TBT from China have been dumped and subsidized, as well as evidence that discloses a reasonable indication that the dumping and subsidizing have caused injury or are threatening to cause injury to the Canadian industry producing like goods.
[4] On August 31, 2026, pursuant to subsection 31(1) of SIMA, the CBSA initiated investigations respecting the dumping and subsidizing of TBT from China.
Evidence of dumping
[74] The complainants alleged that the subject goods from China have been injuriously dumped into Canada. Dumping occurs when the normal value of the goods exceeds the export price to importers in Canada.
[75] Normal values are generally based on the domestic selling price of like goods in the country of export where competitive market conditions exist or as the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits.
[76] The complainants made the allegations that the TBT sector in China may not be operating under competitive market conditions and as such, the domestic market for TBT may not be relied upon for the purpose of determining normal values. Accordingly, the complainants submitted that normal values should be determined under section 20 of SIMA.
[77] The export price of goods sold to importers in Canada is generally the lesser of the exporter’s selling price and the importer’s purchase price, less all costs, charges and expenses resulting from the exportation of the goods.
[78] To ensure that the estimated margins of dumping incorporated a reasonable product mix and were representative of the overall range of subject imports, estimates were conducted for five benchmark products, which were selected as they are the most common TBT models in the market: 11R22.5; 11R24.5; 255/70R22.5; 295/75R22.5; and 455/55R22.5.
[79] Estimates of normal values and export prices by both the complainants and the CBSA are discussed below.
[80] The complainants calculated margins of dumping for the period of January 1, 2025 to December 31, 2025. The information provided by the complainants, combined with the CBSA’s own import data, enabled the CBSA to calculate normal values and export prices for the POI.
Evidence of subsidy
[110] In accordance with section 2 of SIMA, a subsidy exists where there is a financial contribution by a government of a country other than Canada that confers a benefit on persons engaged in the production, manufacture, growth, processing, purchase, distribution, transportation, sale, export or import of goods. A subsidy also exists in respect of any form of income or price support within the meaning of Article XVI of the General Agreement on Tariffs and Trade, 1994, being part of Annex 1A to the World Trade Organization (WTO) Agreement that confers a benefit.
[111] Pursuant to subsection 2(1.6) of SIMA, a financial contribution exists where:
- practices of the government involve the direct transfer of funds or liabilities or the contingent transfer of funds or liabilities
- amounts that would otherwise be owing and due to the government are exempted or deducted or amounts that are owing and due to the government are forgiven or not collected
- the government provides goods or services, other than general governmental infrastructure, or purchases goods or
- the government permits or directs a non-governmental body to do anything referred to in any of paragraphs (a) to (c) above where the right or obligation to do the thing is normally vested in the government and the manner in which the non-governmental body does the thing does not differ in a meaningful way from the manner in which the government would do it
[112] A state-owned enterprise (SOE) may be considered to constitute “government” for the purposes of subsection 2(1.6) of SIMA if it possesses, exercises, or is vested with, governmental authority. Without limiting the generality of the foregoing, the CBSA may consider the following factors as indicative of whether the SOE meets this standard: 1) the SOE is granted or vested with authority by statute; 2) the SOE is performing a government function; 3) the SOE is meaningfully controlled by the government; or 4) some combination thereof.
[113] If a subsidy is found to exist, it may be subject to countervailing measures if it is specific. A subsidy is considered to be specific when it is limited, in law or in fact, to a particular enterprise or is a prohibited subsidy. An “enterprise” is defined under SIMA as also including a “group of enterprises, an industry and a group of industries”. Any subsidy which is contingent, in whole or in part, on export performance or on the use of goods that are produced or that originate in the country of export is considered to be a prohibited subsidy and is, therefore, specific according to subsection 2(7.2) of SIMA for the purposes of a subsidy investigation.
[114] In accordance with subsection 2(7.3) of SIMA, notwithstanding that a subsidy is not specific in law, a subsidy may also be considered specific in fact, having regard as to whether:
- there is exclusive use of the subsidy by a limited number of enterprises
- there is predominant use of the subsidy by a particular enterprise
- disproportionately large amounts of the subsidy are granted to a limited number of enterprises and
- the manner in which discretion is exercised by the granting authority indicates that the subsidy is not generally available
[115] For purposes of a subsidy investigation, the CBSA refers to a subsidy that has been found to be specific as an “actionable subsidy”, meaning that it is countervailable.
Future action
[182] The CITT will conduct a preliminary inquiry to determine whether the evidence discloses a reasonable indication that the alleged dumping and subsidizing of the goods has caused or is threatening to cause injury to the Canadian industry. The CITT must make its decision on or before the 60th day after the date of the initiation of the investigations. If the CITT concludes that the evidence does not disclose a reasonable indication of injury to the Canadian industry, the investigations will be terminated.
[183] If the CITT finds that the evidence discloses a reasonable indication of injury to the Canadian industry and the CBSA’s preliminary investigation reveals that the goods have been dumped and/or subsidized, the CBSA will make a preliminary determination of dumping and/or subsidizing within 90 days after the date of the initiation of the investigations, by November 30, 2026. Where circumstances warrant, this period may be extended to 135 days from the date of the initiation of the investigations.
[184] Under section 35 of SIMA, if, at any time before making a preliminary determination, the CBSA is satisfied that the volume of goods of a country is negligible, the investigations will be terminated with respect to goods of that country.
[185] Imports of subject goods released by the CBSA on and after the date of a preliminary determination of dumping and/or subsidizing, other than goods of the same description as goods in respect of which a determination was made that the margin of dumping of, or the amount of subsidy on, the goods is insignificant, may be subject to provisional duty in an amount not greater than the estimated margin of dumping and/or the estimated amount of subsidy on the imported goods.
[186] Should the CBSA make a preliminary determination of dumping and/or subsidizing, the investigations will be continued for the purpose of making a final decision within 90 days after the date of the preliminary determinations.
[187] After the preliminary determinations, if, in respect of goods of a particular exporter, the CBSA’s investigations reveal that imports of the subject goods from that exporter have not been dumped or subsidized, or that the margin of dumping or amount of subsidy is insignificant, the investigation(s) will be terminated in respect of those goods.
[188] If final determinations of dumping and/or subsidizing are made, the CITT will continue its inquiry and hold public hearings into the question of material injury to the Canadian industry. The CITT is required to make a finding with respect to the goods to which the final determinations of dumping and/or subsidizing apply, not later than 120 days after the CBSA’s preliminary determinations.
[189] In the event of an injury finding by the CITT, imports of subject goods released by the CBSA after that date will be subject to anti-dumping duty equal to the applicable margin of dumping and countervailing duty equal to the amount of subsidy on the imported goods. Should both anti-dumping and countervailing duties be applicable to subject goods, the amount of any anti-dumping duty may be reduced by the amount that is attributable to an export subsidy.
