China lost its appeal of a World Trade Organization ruling in favor of the U.S.’s sharply increased tariff on consumer tires imported from that country.
The three-tier tariff, instituted in September 2009, added significantly to the price of tires brought in from China, impacting both major tiremakers and Chinese producers. The first-year added tariff was 35%, with the level dropping to 30% as of Sept. 26, 2010. It will drop further to 25% later this month.
The WTO appeals panel said Sept. 5, in a 123-page ruling, that U.S. officials "acted consistently" with international trade laws, reaffirming the tariff, which has been appealed a number of times.
The Xinhua news service said that China regretted the WTO ruling, and called the added tariff a "protectionist measure unsupported by the U.S. tire industry" and was imposed "only to accommodate the country’s domestic political pressure."
In a report by the China Daily, Yan Wei, chief economist of Orient Securities Co., said, "Different groups in the United States have adopted different attitudes toward trade protectionism. The workers union (USW) firmly supports the tariffs, while the manufacturers show an ambiguous or opposing attitude as they have manufacturing bases in China and import from China." The tariffs, he said, did little to create jobs for the U.S. but largely shifted the import source from China to countries such as Brazil and Mexico.
USW President Leo Gerard said of the ruling, "The WTO reaffirmed that President Obama’s decision to stand up for America’s workers against the flood of passenger and light truck tire imports from China were legal and justified. Since relief was granted by the president, the law has had its intended effect. Investments in U.S. tire manufacturing are up, jobs have been created and our companies are shipping more tires to consumers.”