An executive from a member of the American Coalition for Free Trade in Tires says the duties that the United States International Trade Commission (U.S.) wants to apply to certain consumer tire imports from China would make the tires "non-competitive."
Last week, the ITC proposed that a 55% duty be placed on Chinese tire imports during the first year of sanctions, with a 45% duty the following year and a 35% duty applied the third year. Those duties would be in addition to current duties.
The United Steelworkers originally petitioned the federal government to impose a quota of 21 million units a year on certain Chinese-built passenger and light truck tires.
While the union did not receive its requested quota, "the level of tariffs suggested" would, in reality, be equivalent to the imposition of a severe quota, says Dennis King, vice president of Dunlap & Kyle Co., a member the coalition. "A 55% tariff is way too high."
Jim Mayfield, president of fellow coalition member Del-Nat Tire Corp., agrees. "The duties they have recommended may even be more punitive" than a quota.
"An additional tariff would severely impact the ability to import anything from China. In the short term, there would be disruptions in the U.S. (market), and in the long term, that (Chinese) manufacturing base will shift to low-cost countries."
Mayfield says many of Del-Nat's stockholders have begun contacting their congressmen "to let them know the impact (duties) will have on their busineses. And that's something we feel has been lost in this whole thing... there are jobs at stake with independent tire dealers across the country."
The ITC is expected to forward its remedies to President Barack Obama shortly. President Obama will make the final ruling on the subject in September.
