U.S. Panel Rules Against Chinese Tire Makers

U.S. Panel Rules Against Chinese Tire Makers

U.S. Panel Rules Against Chinese Tire Makers
By Judith Burns

WASHINGTON — The sale of certain Chinese-made tires is disruptive to the U.S. market, the U.S. International Trade Commission ruled Thursday.

By a 4-2 vote, the panel sided with a U.S. labor union, finding that low-cost Chinese-made tires, used on cars, light trucks and sport-utility vehicles, are being imported at a rate that threatens U.S. tire makers.
The commission is expected to vote June 29 on proposed remedies, which could include stricter quotas or tariffs on the Chinese-made tires, a commission spokeswoman said. The U.S. Trade Representative also will weigh in. A final decision by U.S. President Barack Obama isn’t likely until September.

The case was filed April 20 on behalf of the United Steelworkers union, which represents about 15,000 tire workers throughout the U.S.

China was the largest source of car tires imported to the U.S. last year, shipping nearly 46 million tires with a value in excess of $1.7 billion, according to the union’s filing. The Chinese-made tires sell for around $50 to $60 each, about half the price of some premium U.S. brands. The union said imports of Chinese-made tires nearly tripled by volume between 2004 and 2008, while domestic production fell by more than 25%.

“This import surge has caused major job losses and plant closures in the United States,” the union said.

The Steelworkers expect proposed remedies in the case will provide the time needed to rebuild the U.S. tire industry, International President Leo Gerard said in a prepared statement. The quota sought by the union, which would return China tire imports to a 2005 level, would increase 5% a year over three years.

Marguerite Trossevin, a principal at Jochum Shore & Trossevin, a Washington, D.C. legal and lobbying firm that specializes in trade issues, said her clients would fight quotas. She represents the American Coalition for Free Trade in Tires, a group comprised of U.S. dealers and distributors, including those selling private-label brands often manufactured outside the U.S.

No U.S. tire maker supported the union’s petition, undercutting the Steelworkers’ case, said David Spooner, an attorney with the law firm Squire, Sanders & Dempsey, who represents Chinese tire manufacturers. He said U.S. tire makers had a banner year in 2007, despite a big jump in Chinese tire imports.

“This case will not change the situation in the U.S. market and will only hurt consumers,” predicted Philippe Bruno, a partner with the law firm of Greenberg Traurig, who represents American Pacific Industries, a large U.S. tire importer.

While the Steelworkers are seeking lower quotas for Chinese tire imports, the makers and distributors of Chinese tires favor higher tariffs as a remedy. “You may pay a little bit more but you’ll still be able to find the tires,” Mr. Bruno said.

Source: The Wall Street Journal, June 18, 2009

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