Mr. Zhong goes to Washington

ERJ staff report (TB)

Washington DC - Zhong Shan, a Chinese vice commerce minister, is in Washington this week to talk to senior trade officials of the Obama administration in an attempt to persuade the administration not to levy duties against Chinese passenger and light truck tyre imports.

Zhong is expected to meet with officials of the State, Commerce and Treasury Departments and the Office of the US Trade Representative (USTR) during his visit.

On June 29, the U.S. International Trade Commission (ITC) granted the United Steelworkers' (USW) petition for relief from imports of Chinese passenger tyres under Section 421 of the Trade Act, agreeing with the USW that the imports were causing market disruption in the U.S. tyre industry.

However, instead of the quotas the USW requested, the agency recommended to President Obama that he institute three years of tariffs against Chinese tyre imports - 55 percent for the first year, 45 percent for the second and 35 percent for the third.

The USTR held a hearing Aug. 7 on the Chinese tyre issue, and President Obama has a Sept. 17 deadline to decide whether to order the duties, take alternative action, or take no action at all.

Opinions on Mr. Zhong's visit were sharply divided between the USW and the nation's tyre dealers, who depend on Chinese tyres to serve lower-end consumers, and insist tyre imports from China do not directly compete with the tyres made by US manufacturers.

“More than 5.3 million US manufacturing jobs have been lost since 2000 - 5,100 in domestic tyre manufacturing alone,” said Kerri Toloczko, senior analyst for the Alliance for American Manufacturing, an organization formed by the USW to work together with U.S. manufacturers on issues of common interest. “Unless the U.S. takes action in this case, another 3,000 tyre workers could be laid off before year's end.”

Vic DeIorio, executive vice president for GITI Tire (U.S.) Ltd., the U.S. marketing arm of China's GITI Tire (China) Investment Co. Ltd., said the duties would put at least 25,000 jobs in the greater tyre industry - including dealers and distributors - at risk, while adding very little employment in tyre manufacturing.

“The tariff would lead to market disruptions and higher prices on all low-cost tyres, regardless of manufacturer, for American consumers,” DeIorio said. Tariffs would also have a negative effect on safety, he said, as cash-strapped consumers put off tyre replacements in the face of rising prices.

Toloczko discounted the reasoning of Mr. DeIorio and other tyre dealers and distributors. “I'm not sure how manufacturing a product domestically causes domestic job loss,” she said.

Mr. Zhong and officials of the Embassy of the People's Republic of China could not be reached for comment.

From Tire Business (A Crain publication)