President Obama agreed Friday to impose a 35 percent tariff on Chinese tires.
The decision came after the U.S. International Trade Commission deemed that the mass import of Chinese tires has disrupted the market. Chinese tire imports have tripled since 2004, and some 5000 U.S. jobs have been lost. The United Steelworkers Union filed a formal complaint in May, and sees this tariff as a small victory. The steelworkers make up half of the U.S. tire workforce.
Forty-six million tires were imported from China last year, many by U.S. tire companies Goodyear and Cooper. These companies still produce their premium products domestically, but often outsource manufacturing of their lower-end tires to China. Industry representatives have come out against the tariff, arguing that it will hurt Americans who purchase low-end tires, and that it might force tire retailers and wholesalers to cut jobs.
Obama tried to tone down speculation that the tariff would spark a trade war. “I think it’s in China’s interest and our interest and the world’s interest to avoid protectionism, particularly just as world trade is starting to bounce back from the huge decline that we have seen in the last year.”
Chinese officials call the tariff protectionism, and say that the global economy crisis, not Chinese imports, is to blame for the slowdown in U.S. tire manufacturing. This issue will surely be a topic of discussion at the G-20 summit held in Pittsburgh later this month.
Source: Automotive News