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Tire sanction to cost both Chinese, American jobs
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08:04, August 07, 2009

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Chinese tire producers, who are facing proposed sanctionative tariffs from the U.S. authorities, appeal for "fair ruling" from the U.S. government, a Chinese tire industry representatives told Xinhua in an interview on Wednesday.

"The proposed sanction against Chinese tire export to the U.S. market will cause a lose-lose situation on both countries," said Mary Xu, deputy secretary general of the China Rubber Industry Association and the leading member of a Chinese tire producers delegation in Washington.

"We have filed much evidence demonstrating that Chinese tire imports do not injure the U.S. tire industry. The restriction of the Chinese tires cannot solve any problem faced by the U.S. tire industry, and further would hurt U.S. tire distributors and consumers," the delegation said in a letter to the U.S. President Barack Obama before a government hearing on this issue on Friday.

The U.S. Steelworkers union, which represents workers at major U.S. tire manufacturers, filed a petition against China earlier this year for import relief and won a favorable ruling from the U.S. International Trade Commission (ITC).

The panel recommended Obama impose a 55 percent tariff on the Chinese tire imports which would be reduced to 45 percent in the second year and 35 percent in the third before being removed.

The steelworkers asked for protection under Section 421 of U.S. trade law, which only requires petitioners to show that imports from China have disrupted the U.S. market.

"Chinese tires are welcomed by the American consumers who believe that our products have good cost performance," Xu said. "Chinese tires are relatively lower ended and mainly for the replacement of tires. The U.S. tire makers do not produce these types of tires. So our tires are complementary, not competitive to the U.S. products."

Xu said that the tariffs will hurt the American consumers and cause job loss as well.

"This case will influence about 100,000 U.S. employees across the country, including tire sellers, distributors, transporters and logistic companies. More than 25,000 American workers may lose their jobs if the sanction is implemented," Xu said.

"And about 100,000 Chinese workers from 20 tire producers will be influenced by the case," she added.

The ITC said it submitted its investigation report to President Obama and the U.S. Trade Representative (USTR) Ron Kirk last month.

The USTR hearing would be the final event in the investigation before Obama rules on the ITC recommendation.

The USTR will submit its remedy recommendation to Obama by September 2. He is required to make a decision within 15 days after receiving it.

Xu said that the tariffs proposal are widely opposed by the U.S. consumers and tire distributors.

In a letter to President Obama, the American Tire Industry Association (TIA) opposed petition to limit imports of Chinese-made tires and said that it will hurt the U.S. economy and consumers.

This case also aroused closely watch of trade protectionism since it is seen as a test case for the Obama administration's trade policy.

The president's decision will tell the world if he believes his own rhetoric about the dangers of protectionism in a weak global economy, The Wall Street Journal said in a report Tuesday.

"Chinese tires have fairly traded in the U.S. for years. I think limiting trade in fairly traded goods is protectionism. It would contradict recent pledges by the United States to avoid protectionism and to work in cooperation with China to promote trade," said Xu.

"We cannot predict the result of the case right now," Xu said. "What we expect is a fair ruling from the U.S. government."


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