WASHINGTON (Aug. 11, 2009)—Imposing double-digit tariffs on imports of Chinese passenger and light truck tires could indirectly endanger lives on U.S. highways as customers faced with higher prices opt for used tires or delay tire purchases altogether, Del-Nat Tire Corp. President Jim Mayfield said recently.
Mayfield, testifying Aug. 7 at the Office of the U.S. Trade Representative in Washington, cautioned that the proposed tariffs—as high as 55 percent of a tire's value—would not only increase the price of entry-level tires considerably, it would “translate into price increases across the board,” perhaps even double the price of these lower-tier tires.
“Unfortunately the (added) cost will fall most heavily on those consumers who can least afford it,” Mayfield said. “Increasing tire prices by imposing tariffs on entry-level tires from China would only make this very bad situation even worse and endanger more lives.”
Mayfield testified on behalf of the American Coalition for Free Trade in Tires, a group of tire importers and distributors formed to represent the industry's interests in the ongoing tariff debate.
Higher prices could cause many U.S. consumers to delay overdue tire replacement purchases, he said, leading to safety issues on the nation's roads.
To illustrate his concern, Mayfield related two examples.
“One customer that came into a Del-Nat shareholder's outlet drove in with two of those little donut spare tires on his car. Another came in with duct tape wrapped around the tire to cover the steel belt that was exposed on the right front tire.”
Mayfield said many customers are turning to used tires to fill the gap, but even that option is starting to dry up as the used tire supply dwindles.
Mayfield also weighed in on the U.S. jobs issue, saying, “I can tell you U.S. tire producers have no interest in making entry-level tires. Over the years U.S. producers have canceled or refused to renew our contracts to produce private brandsà. So we had to look to foreign suppliers to provide our private brand tires to meet the needs of our customers.”
Mayfield said this process of finding new sources of supply would create short-term shortages of entry-level tires and eventually force some distributors unable to find suitable alternative sources out of business.