News from Notch Consulting, Inc.

September 4, 2009

Various Groups Weigh in on Chinese Tire Tariffs

Filed under: Uncategorized — Notch @ 10:29 am

Over the last several weeks, numerous interested parties have weighed in on President Barack Obama’s pending decision on whether or not to impose tariffs on imports of Chinese passenger and light truck tires into the United States. On June 18, the International Trade Commission voted to recommend tariffs against Chinese tire imports of 55 percent the first year, 45 percent the second, and 35 percent the third. On September 2, the Office of the U.S. Trade Representative (USTR) submitted its recommendations (from Tire Business, subscription required) to the president on whether to implement the tariffs, though, as is customary, its recommendations were not made public. A decision on the matter is due by September 17.

On September 1, the Committee to Support U.S. Trade Laws (CSUSTL) — a coalition consisting of nearly 100 organizations, including the United Steelworkers (USW), which was the original petitioner to the ITC — has written the president to urge approval of the tariffs.

In a press release, David Hartquist, executive director of CSUSTL, wrote, “We write to underscore both the importance of Section 421 as a legitimate trade remedy, and to respectfully urge its application in appropriate cases. Campaign promises should be fulfilled and effective enforcement action taken to provide full relief where merited.”

On September 2, Harold Meyerson of the Washington Post wrote an editorial (subscription required) in favor of the tariffs. On August 4, the Wall Street Journal published an editorial strongly opposing the tariffs:

As Mr. Obama faces his moment of truth on tires, he ought to look at a report issued last week by Rutgers economist Thomas J. Prusa examining how the ITC’s proposed tariffs would ripple through the U.S. economy. Mr. Prusa calculates that each job “saved” by the ITC’s tariffs would come at the cost of at least 12 jobs lost, and possibly more than 25. Most tire-related employment in America consists of the people who distribute and install tires, not people who produce them. By depressing tire sales, a tariff would jeopardize those jobs.

As reported by Tire Business, the Tire Industry Association and many major tire retailers and distributors are fighting the tariffs, as are tire makers including Cooper Tire & Rubber Co. and Toyo Tire U.S.A. Inc. These parties assert that the duties would disrupt the U.S. tire market far more than anything they were supposed to correct.

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