Monday’s decision, which is being forwarded to President Obama for his consideration, would place a three-tiered additional duty on the tires based on their value – 55% in the first year, 45% in the second year, and 35% in the third year.
The fees would presumably make the retail cost of Chinese tires more expensive in the U.S.
The duty plan was not sought by the United Steelworkers, which petitioned the government for a rollback in the number of consumer tires imported from China.
On June 18, the ITC ruled in favor of the USW by a 4-2 vote. That same 4-2 majority made the duty recommendation.
In addition to the duty, the ITC recommends that the President direct the U.S. Department of Labor and the U.S. Department of Commerce to provide expedited consideration of Trade Adjustment Assistance for firms and/or workers that are affected by the imported tires.
As expected, the USW hailed the ITC decision. Leo Gerard, USW international president, said: “Today’s remedy vote by the ITC is a great victory for the USW, its members and for all U.S. tire workers. The tariffs voted by the commissioners should remedy the market disruptive surge in Chinese tire imports that have caused harm to the domestic industry.”
“Both our own economic analysis as well as that of the ITC show that the recommended tariffs will have significant beneficial effects for the domestic industry,” said Tom Conway, USW vice president. “We applaud the Commission’s decision and look forward to working with the Obama Administration to see that it is fully implemented.”
On the other side of the aisle, Giti Tire called the decision "decidedly protectionist" and said it would take its case to President Obama. "The administration has a broader set of responsibilities and a wider vantage point to devise a successful solution in this case," said Vic DeIorio, Giti Tire’s executive vice president in the U.S.
“The proposed remedy if enacted will not help U.S. workers. Chinese-made tires have filled a market void created when U.S. manufacturers abandoned the economy segment of the mass market," said DeIorio. "The duty will not have the effect of increasing domestic production of low-cost tires – it simply will not help U.S. workers. Rather, the result will be that American tire manufacturers will continue to focus on premium tires, as they have said they will do.
"If there is a barrier placed on tires produced in China, U.S. manufacturers and distributors will simply increase importation of tires from other countries, such as Venezuela. What’s more, duties will result in higher tires prices for American consumers at a time when they can ill afford it," DeIorio added.
A news report from Oregon said that Les Schwab Tire Centers “reacted negatively to a trade panel recommendation for higher tariffs,” and that “Much of the company’s business is based on sales of less expensive imported tires.”
Schwab released a statement that said the only thing higher tariffs will mean is higher prices for U.S. consumers. (Tire Review/Akron)
