Because organizing workers at the many non-union tire factories in the U.S. has long been a difficult proposition for the United Steelworkers, the Pittsburgh-based union has taken on a different role in the last decade or so.
That initiative has been to push forward investigations into what it claims are unfair trade practices that cost American jobs. It argues that if companies import tires from countries at less than fair market value or where the tire producers received financial assistance from the government, then domestic tire producers will be at an unfair disadvantage and won't be able to compete with these product lines. Union officials say they believe their efforts also benefit workers at domestic non-union shops, but the USW says that is fine because it means more good paying jobs in the U.S.
The USW has had a fair bit of success bringing about these trade actions, dating back to President Obama's first term in office. And the Department of Commerce has made it clear that one of the chief aims of President Trump's administration is U.S. trade laws, with the DOC starting more than 250 antidumping and countervailing duties investigations while he has been in office.
Its latest petition—filed in May—takes aim at rising consumer tire imports from South Korea, Taiwan, Thailand and Vietnam. The International Trade Commission and the DOC are investigating whether the union's claims are justified, and if tariffs and duties should be levied against the tire imports.
The ITC just completed gathering evidence and testimony electronically—foregoing the normal hearings because of the coronavirus pandemic—and must reach a preliminary decision by July 17.
The Steelworkers provided statements from the presidents of USW locals at seven U.S. facilities that the union claimed are most impacted by the low-cost imports, including from the local at Goodyear's now-closed plant in Gadsden, Ala. The union leaders said production at their factories boomed in 2015-16 when higher duties were enacted against passenger and light truck tires imported from China.
But as the imports were transferred to other lower-cost locales—particularly Thailand, where Chinese firms quickly put in new factories—production at the USW-represented facilities dropped precipitously, along with jobs at those plants.
Of course, politics plays a big role in this. It's one of the few areas where bipartisan support can be found these days. After all, what legislator doesn't want to be perceived as fighting for American manufacturing jobs? A total of 11 senators—six Democrats and five Republicans—from seven states with tire factories wrote to the chair of the International Trade Commission asking that the USW's petition be given "full and fair consideration."
The letter from the senators claimed they were writing on behalf of U.S. producers of lightweight tires and their workers "who face challenges from unfairly traded imports."
There is another side to this story, and it is telling in that tire manufacturers themselves rarely, if ever, speak out in favor of higher tariffs and duties. Often, they have global production networks that may be producing some of the imports in question, or in other cases they don't want to produce tires at the low-end of the market. Their margins come from the high-end performance tires, along with larger-rim sizes that have been growing in popularity in the U.S. market for many years.
Those offering testimony opposing the USW's position included several tire producers along with a whole host of importers.
Richard Smallwood, president and CEO of Sumitomo Rubber North America Inc., summed up a key point in the argument against antidumping and countervailing duties: The import supply lines help bridge the gap between what tire demand is in the U.S. and what domestic manufacturers can produce.
Hankook Tire America Corp. also provided testimony in opposition. It has a production site in the U.S., but its parent is based in South Korea, one of the nations that is the subject of the probe. Hankook argued that imports from South Korea should not be lumped in with the other imports, because tires from that nation don't compete against the low-cost imports as they are higher quality and have higher-tier brand recognition in the states.
Representatives of the many U.S.-based distributors who handle the imports that are at the center of the investigation claim the tires they import and sell here pose no threat or injury to the U.S. tire manufacturers. In fact, they argue that the reverse is the case: That the domestic industry would be disrupted if their products weren't available to sell these tires.
Importers say there is not nearly enough capacity at U.S. tire plants to cover the shortfall if these imports were not available, and most of the firms have no desire to make tires to fulfill the low-price point sector where they would stand to make little or no profit. Part of their argument also centers on the claim that the tire consumer will be the loser in the end, paying higher prices if the imported tires are subject to tariffs.
Of course, one of the key questions about the calls for reshoring of manufacturing and cries to "Buy American" is how deeply the public feels about such initiatives. When faced with a hit to their own pocketbook, will their commitment run deep enough to pay more for U.S.-produced goods that can bring or maintain good jobs here, or opt instead to go for cheaper imported goods that saves them money now, but may cost U.S. jobs later?