Congressmen demand monitoring of effects of Chinese tyre tariffs

ERJ staff report (TB)

Washington DC -- In a letter to US Trade Representative (USTR) Ron Kirk, two congressmen demanded that the Obama administration establish a comprehensive system of monitoring the economic effects of the special tariffs on Chinese passenger and light truck tyres levied last Sept. 11.

“It is…essential that the ITC (International Trade Commission) and the administration monitor the effects of the tariff not only on the domestic tyre producers, but also on other domestic sectors, including distribution and retail, and on consumers,” said Representatives. Dan Boren, (Democrat for Oklahoma), and Kevin Brady, Republican for Texas), in their Jan. 21 letter to Mr. 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 tyre imports from China. But they had heard of significant increases on tyre prices as well as job losses in the tyre distribution and retail sectors, they said.

Whatever system the administration puts in place to monitor the effects of the tyre tariffs must consider not only employment at US tyre manufacturing plants, but also such items as retail price trends for domestic and foreign tyres; changes in tyre imports from countries other than China; and changes in tyre retail and distribution employment, the congressmen said.

In a press release, the Tire Industry Association (TIA)-which opposes the tariffs-praised the Boren-Brady letter.

This is the first time the US 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 (USW) 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,” Mr. Fiore said.

The USW petitioned the ITC in April for relief under Section 421, which allows trade remedies for US 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.

From Tire Business (A Crain publication)