USTR sends recommendations on Chinese tyre tariffs to President Obama

ERJ staff report (TB)

Washington DC -- Today the Office of the US Trade Representative (USTR) sent to President Obama its recommendations on whether to order tariffs against imports of Chinese passenger and light truck tyres under Section 421 of the Trade Act. The report was not made public, as is customary with USTR recommendations in trade cases.

The USTR held a hearing Aug. 7 on the International Trade Commission's recommendation that President Obama order three years of duties on Chinese tyres. The ITC voted 4-2 on June 29 in agreement with the United Steelworkers (USW) union that massive increases in Chinese imports had caused market disruption in the US tyre industry.

The suggested tariffs were 55 percent the first year, 45 percent the second, and 35 percent the third.

Though the USW had asked for quotas instead of duties, it readily supported the ITC's decision. In a Sept. 2 press release, USW International President Leo W. Gerard predicted President Obama would approve the tariffs by the statutory Sept. 17 deadline.

“This is the time and this is the place for the president to open the trade enforcement toolbox,” Mr. Gerard said. “We are confident the president shares our values of promoting a rising standard of living for the American worker. This trade case gives him the chance to put into practice his pledge to level the playing field and give all Americans a chance to share in the benefits of balanced trade.”

The Tire Industry Association and many of its major retailer and distributor members are fighting the tariffs, as are tyre makers including Cooper Tire & Rubber Co. and Toyo Tire U.S.A. Inc.

Tires imported from China do not compete directly with the mostly premium tyres made in the US, opponents of the duties said, and all the tariffs would do is create shortages of lower-value tyres and raise prices on consumers who could ill afford the increase. Cooper and Toyo told the USTR that tariffs would completely disrupt their production plans, which include producing tyres in China for the lower end of the US market.

From Tire Business (A Crain publication)