by Wei Jing
WASHINGTON, Aug. 7 (Xinhua) -- Representatives of American tire distributors told officials from the Office of U.S. Trade Representative (USTR) at a hearing Friday that Chinese made tires do not compete directly against U.S. made products in the North American market.
They further pointed out an increase on trade tariff against low-cost Chinese tires will cause more job losses in the U.S. and additional outlay for American consumers.
Tim Stratford, assistant U.S. Trade Representative for China Affairs, speaks during the public hearing on Chinese tire, in Washington, U.S. on Aug 7, 2009. (Xinhua/Zhang Yan)
Contending against a recommendation made by the
International Trade Commission (ITC) on June 29 to impose import duties on
Chinese tires by as much as 55 percent, Jim Mayfield, President of Del-Nat Tire
Corp. which represents small and independent tire distributors in the U.S., told
the government panel that American tire makers are not making "entry level
tires," the subject of the trade dispute.
"They tell me 'we got out of that business and we are
not going back'," Mayfield said.
Mayfield said for the past 15 years, major U.S.
producers had focused on higher profit and better performing tires instead of
what industry insiders call "tier three tires" that serve lower end and
He said that led distributors like him to look for
foreign suppliers in order to cater the niche market at the bottom of the
pyramid, separated from the higher end market that U.S. manufacturers are after.
The ITC proposal to activate a three-year duty hike against Chinese made "tier three tires" is the result of a petition brought by the U.S. Steelworkers Union (USW) which represents workers at large U.S. tire manufacturers.
USW's petition was based on Section 421 of U.S. Trade Act of 1974, which allows the U.S. government to take punitive action if imports of a product from China are determined to "cause or threaten to cause market disruption to the domestic producers."
Leo W. Gerard, president of the U.S. Steelworkers Union (USW), listens to a question during the public hearing on Chinese tire, in Washington, U.S. on Aug 7, 2009. (Xinhua/Zhang Yan)
Representatives from USW argued at Friday's hearing that "a flood" of Chinese import from 2004 to 2008, an increase of 215 percent by volume, caused 5,100 U.S. job losses as tire plants closed down.
Mary Xu (R), deputy secretary general of the China Rubber Industry Association, and David Spooner, working for Squire, Sanders & Dempsey LLP, listen to a question during the public hearing on Chinese tire, in Washington, U.S. on Aug 7, 2009. (Xinhua/Zhang Yan)
But Mary Xu, deputy secretary general of the China
Rubber Industry Association, told the panel that increase in Chinese tires
import to the U.S. is modest.
It grew 2 percent in 2008 over volume from 2007. The
general trend in 2009 was declining before the threat of a 55 percent hike in
tariff triggered a recent surge.
U.S. tire distributors estimate Chinese tires occupy
roughly 15 percent of the U.S. market.
Members from the government panel that includes
officials from the USTR, the State Department and the Labor Department, said an
important point in deciding the up-or-down vote on the ITC recommendation is the
impact of possible job losses caused by the decision.
Thomas Prusa, professor of economics at Rutgers
University, testified if high tariff made import of Chinese tires
non-profitable, thus unattractive to U.S. distributors, for every job saved or
recreated at a U.S. tire factory, a dozen to 25 jobs in the distribution sector
could be lost due to the elimination of the import business and the decline in
sales and tire installation jobs caused by higher cost of tires.
Prusa believes the ITC ruling narrowly focused on job
losses in the U.S. tire industry, but lacks consideration of an overall impact
to the U.S. economy.
Furthermore, he estimates U.S. consumers would have
to pay 600 million to 700 million dollars extra per year for the more expensive
U.S. made tires if American manufacturers decided to return to that market.
No major American tire makers or auto makers, the
tire industry's biggest client, supports the ITC decision.
The USTR must submit a policy recommendation to the
White House by September 2 on whether or not to impose the tariff. U.S.
President Barak Obama has 15 days after that to give a final ruling.
This decision, Mr. Obama's first on a U.S.-China
trade dispute, comes one week before he hosts Chinese President Hu Jintao in
Pittsburg for the G-20 meeting in September.
Chinese producers "expect fair ruling"
on proposed tire sanction from U.S. gov't
By Xinhua writers: Liu Lina, Liu Hong
WASHINGTON, Aug. 6 (Xinhua) -- Chinese tire
producers, who are facing proposed sanctionative tariffs from the U.S.
authorities, appeal for "fair ruling" from the U.S. government, a Chinese tire
industry representatives told Xinhua in an interview on Wednesday.
"The proposed sanction against Chinese tire export to
the U.S. market will cause a lose-lose situation on both countries," said Mary
Xu, deputy secretary general of the China Rubber Industry Association and the
leading member of a Chinese tire producers delegation in Washington. Full story
China: U.S. gov't should seriously
re-consider tire protectionism
BEIJING, Aug. 3 (Xinhua) -- China's Ministry of
Commerce said on Monday it hoped the U.S. government would listen to its own
industries and not impose protective measures on tires.
The comment came after the U.S. International Trade
Commission (ITC) issued a statement on June 29 recommending falling tariffs of
55 percent, 45 percent and 35 percent over the next three years on motor vehicle
and light truck tires from China. Full story
U.S. tire industry association opposes
petition to limit imports of Chinese-made tires
NEW YORK, June 17 (Xinhua) -- The U.S. Tire Industry
Association (TIA), one of the leading global authorities on tires, said
Wednesday that it opposed petition to limit imports of Chinese-made tires.
The TIA announced their opposition to the proposal
before the U.S. International Trade Commission (ITC), saying that would limit
the import of Chinese-made passenger and light truck tires, according to a TIA
statement released Wednesday. Full story