BOWIE, Md. (Sept. 6, 2011)—The Tire Industry Association is “very disappointed” with the World Trade Organization's reaffirmation of a December 2010 decision upholding the U.S. decision to levy three years of high tariffs against passenger and light truck tire imports from China.
“The timing is perfect for President Obama, because he can call the tariffs a job-creating measure, but we don't see it that way,” said Roy Littlefield, TIA executive vice president.
“We just think it's not creating any new jobs in America,” Littlefield said. “It's had a negative impact on everything from importers to suppliers to dealers to consumers.”
The Obama administration levied the tariffs in September 2009, under Section 421 of the Trade Act, in response to a petition from the United Steelworkers union and after an investigation by the International Trade Commission and the Office of the U.S. Trade Representative.
The tariffs were set at 39 percent for the first year and 34 percent for the second. Starting this month, the tariffs are set at 29 percent before reverting to the traditional 4 percent in September 2012.
A panel of the WTO Dispute Settlement Body ruled in December that the U.S. did not violate international tariff and trade rules when it established the tariffs. China appealed that decision in May 2011, but on Sept. 5 the Appellate Body of the Dispute Settlement Body upheld the earlier ruling.
The panel, the Appellate Body ruled, did not err when it found the ITC accurately assessed the state of competition in the U.S. tire market and properly evaluated the effect of Chinese tire imports as compared with imports from other countries, among other things.
U.S. Trade Representative Ron Kirk called the WTO decision “a tremendous victory” for U.S. manufacturers and workers. USW International President Leo W. Gerard, contradicting TIA, said the tariffs are having their intended effect of increasing investments in U.S. tire manufacturing and creating U.S. tire manufacturing jobs.
The China Rubber Industry Association, however, called the ruling unfair and said the tariffs have only served to allow increased tire imports from countries other than China.