President Barack Obama has imposed a three-year series of tariffs on tires imported from China. The first-year tariff amounts to 35 percent, followed by a second-year fee of 30 percent with 25 percent being charged during the third year of enforcement.
The decision was based on a confidential recommendation promulgated through the U.S. International Trade Commission (ITC) after the United Steel Workers union had filed an unfair-trade case “421 petition” challenging an influx of Chinese-produced car and light truck tires.
The USW maintains that the ruling will “give the domestic industry breathing room” by addressing China’s heightened level of exports and its impact on American tire makers.
“This is an important day for all American workers -- especially the thousands of tire industry workers whose jobs were on the line as a result of a huge surge in Chinese tire imports that began in 2004,” says Leo W. Gerard, the USW’s international president, who notes how the decision means “China and other countries can no longer assume they can engage in predatory trade practices with impunity.”
According to Gerard, “the President understands that providing effective relief from import surges for the U.S. tire industry in this case is fully consistent with our WTO (World Trade Organization) obligations.”
“When the USW filed its trade case, it asked that relief be provided in the form of quotas,” recounts USW International Vice President Tom Conway. “The International Trade Commission agreed with the USW’s view as to the nature of China’s surging exports, but decided that relief in the form of tariffs would best respond to China’s actions. Despite imposing a different remedy than recommended by the ITC, we are optimistic that the step taken by The President will provide real, effective relief,” he explains.
The Consuming Industries Trade Action Coalition (CITAC) opposes the move, saying it could result in higher tire prices and may spark “an avalanche of similar trade case filings and other demands for protectionist measures.”
“President Obama has concluded that protective tariffs on tires from China will allow the U.S. tire industry to adjust,” says Lewis Leibowitz, CITAC’s lawyer. “In fact, we believe that this case will undermine the jobs of many more U.S. workers in downstream industries, including U.S. automakers who already face a very challenging environment.”
Leibowitz maintains that “this is also bad news for U.S. exporters, who will likely be hit by tariffs or other measures from the Chinese government.”
“Despite the erroneous claims by those who filed this 421 petition, the U.S. imposed these tariffs without finding that the Chinese violated any trade agreement or U.S. trade law, but only that Chinese tire imports increased,” adds CITAC Executive Director Eugene Patrone.
“President Obama’s decision goes against his commitment to avoid unnecessary protectionist measures during the current economic crisis,” he continues.
“The tire tariffs will do nothing to stimulate the U.S. economy, but will cost U.S. jobs in other sectors and likely result in demands by other U.S. industries for similar protectionist measures,” Patrone asserts.
For more information, visit www.usw.org and www.citac.info.
