WASHINGTON (Jan. 27, 2010)—The Obama administration must establish a comprehensive system of monitoring the economic effects of the special tariffs on Chinese passenger and light truck tires levied last Sept. 11, two congressmen said in a letter to U.S. Trade Representative Ron Kirk.
“It is…essential that the ITC (International Trade Commission) and the administration monitor the effects of the tariff not only on the domestic tire producers, but also on other domestic sectors, including distribution and retail, and on consumers,” said Reps. Dan Boren, D-Okla., and Kevin Brady, R-Texas, in their Jan. 21 letter to Kirk.
The congressmen said they had not heard of any jobs created by the tariffs, which amount to 35 percent in their first year on top of the normal 4-percent tariffs on tire imports from China. But they had heard of significant increases on tire prices as well as job losses in the tire distribution and retail sectors, they said.
Whatever system the administration puts in place to monitor the effects of the tire tariffs must consider not only employment at U.S. tire manufacturing plants, but also such items as retail price trends for domestic and foreign tires; changes in tire imports from countries other than China; and changes in tire retail and distribution employment, the congressmen said.
In a press release, the Tire Industry Association—which opposes the tariffs—praised the Boren-Brady letter.
This is the first time the U.S. has implemented a trade remedy under Section 421 of the Trade Act, said Paul Fiore, TIA director of government and business affairs. “The United Steelworkers made some very far-reaching claims concerning this tariff, and the Office of the USTR should be diligent in setting up a comprehensive, verifiable system for quantifying the effects of this tariff,” Fiore said.
The USW petitioned the ITC in April for relief under Section 421, which allows trade remedies for U.S. industries harmed by a sharp increase in imports from China. The ITC recommended Section 421 remedies four times for four different industries during the administration of George W. Bush, but President Bush vetoed all those recommendations.