US annuls duty-free status for Thai car tyres

ERJ staff report (TB)

Washington DC -- The US government has withdrawn duty-free status for certain passenger tyres from Thailand under an annual review of the Generalised System of Preferences (GSP) program.

The decision, disclosed last week by the Office of the US Trade Representative (USTR), did not specify what tyres are covered by the change nor what the tariff will be. In general, the US levies tariffs of 4 percent on the declared value of tyres imported from most countries.

Under the GSP program, 131 beneficiary developing countries, including 43 least-developed countries such as Afghanistan, Bangladesh, and Cambodia, are eligible to export approximately 5,000 types of products duty-free to the US, according to information from the USTR.

The US sourced 3.59 million passenger tyres from Thailand last year, according to US Commerce Department data, or about 3.6 percent of all tyres imported. The average value of a car tyre from Thailand was $43.65, the data show. Thailand also sent nearly 600,000 light truck tyres at an average value of $71.68.

US Trade Ambassador Ron Kirk said, “GSP is central to our trade agenda and critical to developing countries' continued growth and development. In our annual review, USTR worked to make sure GSP is working as it should, assessing GSP beneficiaries' development, export competitiveness, and domestic policy practices.

“A well-functioning GSP program can help developing countries grow their export industries while providing US businesses the inputs and products they need to keep good jobs here at home,” he said.

Earlier this year the United Steelworkers (USW) - which represents US tyre workers - said allowing continued duty-free status for Thai tyres would only hurt American workers by undermining the effect of the tariffs on Chinese-made tyres.

Opposing the status change were two tyre manufacturers - Bridgestone Americas Tire Operations L.L.C. and Sumitomo Rubber (Thailand) Co. Ltd. - and tyre importer/distributor Falken Tire Corp.

In 2009, the United States extended duty-free treatment under the GSP program to exports worth $20.3 billion from eligible beneficiary countries, the USTR said. Exports to the US under GSP constituted a significant share of total exports from a number of beneficiary countries, including Paraguay, Lebanon, Tunisia, Fiji, and Armenia.

From Tire Business (A Crain publication)

USTR Kirk Comments On Generalised System Of Preferences Review (Official US Government comments)