European Tires: Trying to "Kick China Out"?

July, the European Tire Association released a position paper targeting the EU's "Industrial Acceleration Act". The Association welcomes the EU's recognition of tire manufacturing as a "strategic, energy-intensive industry", but believes the draft has critical gaps in "market scope, demand-side incentives, investment support, and regulatory coordination".

The core message of this statement from the Association is clear: the European tire industry is using policy tools to "de-Chinese" this product.

Continued Loss of Market Share, Import Surge is the Main Cause

The data provided by the Association is quite direct. Since 2018, EU tire manufacturers have lost over 12% of their domestic market share.

Regarding passenger car tires, the EU domestic share dropped from 71% in 2018 to 59.6% in 2025; truck and bus tire share dropped from 72% to 60.8%. However, imports surged by 195%, mainly driven by China.

A number often overlooked is: replacement tires account for 75% of total tire sales in the EU, but the current "Industrial Acceleration Act" draft offers no support for the replacement market.

The Association's logic is that the Original Equipment (OE) market is bound to car manufacturers, while the replacement market is the core base for European tire companies. If policies only protect OE but not replacement, the resilience of the European automotive value chain cannot be built.

The main breakthrough point for Chinese tires in the EU is precisely the replacement market. The Association elevated the replacement market to the level of a "strategic component", aiming to pave the way for subsequent demand-side incentives.

The Association's Five Policy Demands

At the same time, the Association proposed a set of targeted demands regarding the draft's gaps, essentially adding a protective layer for European manufacturing.

The first is identity upgrading. Recognizing tires as "strategic components" in both OE and replacement markets, not just as ancillary parts for car manufacturers. This step is to let tires hitch a ride on the industrial support of the "Industrial Acceleration Act".

The second is rules of origin plus procurement priority. The Association supports current customs rules, but requires priority layering on top of this—in public procurement and public support programs, prioritize EU manufacturing, followed by customs union countries, then followed by countries meeting equivalent trade and procurement standards.

This means that even if vulcanized in Vietnam or Thailand, as long as it is not in the EU, customs union, or equivalent country, it is ranked third.

The third is support for retreaded tires. In the commercial vehicle sector, the Association calls for support for EU-manufactured retreaded truck and bus tires. Retreading reduces emissions by 52% compared to new tires, allowing it to carry a decarbonization label while protecting the truck and bus tire industry chain in Europe. Chinese truck and bus tires remain a main import source in the EU; retread support is a lever for European companies to fight the new tire price war.

The fourth is upgrading tire labels and linking them to public procurement. The Association cites Commission data stating that EU tire labels save 45 terawatt-hours of electricity annually and reduce 15 million tons of CO2 emissions. Tires account for only 2% to 3% of the value of a complete vehicle, yet affect vehicle energy efficiency by 20% to 30%. The subtext is: public procurement should prioritize buying high-performance labeled tires and European tires, using demand-side boosting to drive European manufacturing.

The fifth is decarbonization funding and permitting acceleration. The Association demands stronger fiscal support for industrial decarbonization projects, accelerate permitting procedures, and clarify governance rules for "Industrial Manufacturing Acceleration Zones". These are hard requirements for European tire plants to cope with high energy and carbon costs.

This Strategy Aligns with Anti-Dumping Measures

The EU "Industrial Acceleration Act" was originally positioned as a pan-industrial policy, and the tire industry wants to fit itself into a strategic cage, getting decarbonization funds, procurement preferences, and rules of origin protection. This strategy aligns with the EU's implemented anti-dumping and pending anti-subsidy measures on tires from China—trade relief manages "blocking", industrial policy manages "supporting".

But this European self-rescue also has hard constraints. First is cost. European energy, labor, and compliance costs are what they are; policies can boost demand and provide funds, but it is hard to level manufacturing costs to the level of China and Southeast Asia.

Second is the spillover form of Chinese capacity. The Association's "priority layering" can block some, but not all. If Chinese companies build plants in regions with EU tariff preferences such as Serbia and Morocco, the rules of origin issue becomes more complex.

Third is how much the draft will ultimately concede is still unknown. Car manufacturers within the EU may not be willing to be bound by "European priority procurement", and cost pressure will be passed back to vehicles. The Tire Association and vehicle manufacturing interests are not fully aligned.

For Chinese companies, several things need to be done in advance. Overseas origins must withstand scrutiny, and supply chains must withstand tracing. High-end performance, green indicators, and new energy vehicle support are the only viable currency to bypass discrimination. Retreading and service systems can be looked at in advance; once the European truck and bus tire retreading loop is leveraged by policy, tire body supply and retreading cooperation might be new entry points.

This statement from the European Tire Association is not the end of the trade war, it is the prologue to industrial policy wars. For Chinese tires, the EU, this largest export market, the game has upgraded from competing on price to competing on origin, green, and high-end.