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1 July 2009
U.S. panel backs duties on low-cost Chinese tires



The Wall Street Journal Europe

By Meena Thiruvengadam

1 July 2009

WASHINGTON -- The U.S. International Trade Commission recommended imposing punitive duties of as much as 55% on low-cost Chinese tire imports because they are disrupting the U.S. market, in a move that could sharply increase costs for consumers.

Trade commissioners Monday voted 4-2 in favor of charging additional duties, on top of existing tariffs of less than 4%. The new duties, which President Barack Obama must approve, would total 55% of total value in the first year, 45% in the second year and 35% in the third year. "In our opinion, these tariff levels would remedy the market disruption that we have found to exist," the commissioners said in a statement

The White House and U.S. Trade Representative declined to comment on the case, which was filed on April 20 on behalf of the United Steelworkers union.

The union, which represents 15,000 tire workers, had sought a cap on the number of passenger-vehicle tires that can be imported from China annually, saying it could save domestic jobs.

China was the largest source of car-tire imports to the U.S. in 2008, shipping nearly 46 million tires valued at more than $1.7 billion, according to the union. Chinese-made tires sell for about $50 to $60, half the price of some premium U.S. brands.

Giti, China's largest tire manufacturer, on Monday called the move "decidedly protectionist" and said it would take its case to President Obama. "The administration has a broader set of responsibilities and a wider vantage point to devise a successful solution in this case," said Vic DeIorio, GITI's executive vice president in the U.S. "The duty will not have the effect of increasing domestic production of low-cost tires -- it simply will not help U.S. workers."


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