WASHINGTON (Aug. 19, 2009)—Zhong Shan, Chinese vice commerce minister, is in Washington this week to talk to senior trade officials of the Obama administration in an attempt to persuade the administration not to levy high duties against Chinese passenger and light truck tire imports.
Zhong is expected to meet with officials of the State, Commerce and Treasury Departments and the Office of the U.S. Trade Representative during his visit.
On June 29, the U.S. International Trade Commission voted 4-2 to grant the United Steelworkers' petition for relief under Section 421 of the Trade Act. The ITC agreed with the USW that Chinese tire imports were causing market disruption in the U.S. tire industry. However, instead of the quotas the USW requested, the agency recommended to President Obama that he institute three years of tariffs against Chinese tire imports—55 percent for the first year, 45 percent for the second, and 35 percent for the third.
USTR held an Aug. 7 hearing on the Chinese tire issue, and President Obama has a Sept. 17 deadline to decide whether to order the duties, take alternative action or take no action at all.
Opinions on Zhong's visit were sharply divided between the USW and the nation's tire dealers, who depend on Chinese tires to serve lower-end consumers and insist tire imports from China do not directly compete with the tires made by U.S. manufacturers.
“More than 5.3 million U.S. manufacturing jobs have been lost since 2000—5,100 in domestic tire manufacturing alone,” said Kerri Toloczko, senior analyst for the Alliance for American Manufacturing, an organization formed by the USW to work together with U.S. manufacturers on issues of common interest. “Unless the U.S. takes action in this case, another 3,000 tire workers could be laid off before year's end.”
But Vic DeIorio, executive vice president for GITI Tire (U.S.), the U.S. marketing arm, said the duties would put at least 25,000 jobs in the greater tire industry—including dealers and distributors—at risk, while adding very little employment in tire manufacturing.
“The tariff would lead to market disruptions and higher prices on all low-cost tires, regardless of manufacturer, for American consumers,” DeIorio said. Tariffs would also have a negative effect on safety, he said, as cash-strapped consumers put off tire replacements in the face of rising prices.
Toloczko discounted the reasoning of DeIorio and other tire dealers and distributors. “I'm not sure how manufacturing a product domestically causes domestic job loss,” she said.
Zhong and officials of the Embassy of the People's Republic of China could not immediately be reached for comment.