Trade group calls for review of China tyre tariffs

ERJ staff report (TB)

Washington DC -- A trade group representing US firms doing business with China is calling on the Obama administration to provide an objective “fact-based” review of the effects of the high tariffs on Chinese consumer tyres because it believes the tariffs haven't helped create US jobs and instead have resulted in higher prices for consumers.

The US-China Business Council (USCBC), a nonpartisan, nonprofit organisation of about 220 US companies that do business with China, issued an open letter Aug. 25 to President Barack Obama, urging him to authorise the US International Trade Commission (ITC) to report on the effects of the tariffs on US consumers and job creation.

“An objective report will provide needed clarity on how these types of tariffs affect our economy and whether they achieve the goals they were designed to meet,” USCBC President John Frisbie said in the letter.

The USCBC said it has found no evidence the tariffs have affected US jobs positively, and conversely said it suspects the tariffs have had a negative economic impact on US consumers.

The Obama administration, acting on a petition by the United Steelworkers (USW), enacted stiff import duties on Chinese consumer tyres for three years, starting Sept. 29, 2009. The duties are 35 percent for the first year, 30 percent the second and 25 percent the third, on top of the existing 4-percent duty. The USW petitioned the federal government for relief under provisions of Section 421 of the US Trade Act of 1974.

In an issues brief posted on the USCBC's website, the group cited US Bureau of Labor Statistics data that show employment in the tyre manufacturing industry was down 10 percent in the first five months of 2010, to 49,800 workers.

The USCBC also cites import data showing that total imports of tyres into the US rose 21 percent by volume and 30 percent by value in the first half of 2010. China's share of the imports fell to 24 percent of the total in June from 45 percent a year earlier.

The trade group notes that the Section 421 statute requires that the ITC collect data on such issues so it can respond to requests for a review.

The 37-year-old USCBC states its mission is to “expand the US-China commercial relationship to the benefit of its membership and, more broadly, the US economy.” It said it favors “constructive engagement” with China to eliminate trade and investment barriers and develop a rules-based commercial environment that is predictable and transparent.

Coca-Cola Co. Chairman and CEO Muhtar Kent chairs the council, which represents both big and small US companies with business interests in China. Among its members are Apple Inc., General Electric Co., Microsoft Corp., Google Inc., Caterpillar Inc. and Wal-Mart Stores Inc.

Goodyear is the sole tyre company member.

From Tire Business (A Crain publication)

Issues Brief from US-C BC