Trade group recommends more taxes on Chinese Tires The Daily Oklahoman (MCT By Chris Casteel, The Oklahoman, Oklahoma City 30 June 2009 Jun. 30--WASHINGTON -- The U.S. International Trade Commission, in a split vote, recommended Monday that higher taxes be imposed on certain Chinese passenger car and light-truck tires as a remedy for the "market disruption" caused by a flood of imported tires from China. The recommendation came on a 4-2 vote and now goes to President Barack Obama, who will have to make a decision by mid-September. Rep. Tom Cole, R-Moore, was among those who urged the commission earlier this month to take action, saying the Chinese imports threatened jobs at two large tire plants in Ardmore and Lawton. Cole said Monday that the commission "has taken a step in the right direction to strengthen and enforce U.S. trade laws. In the coming months, as the ITC's recommendations are reviewed by President Obama, I hope he will use the tools provided in American trade law to support our nation's tire workers. It's clear that action needs to be taken to curb the glut of imported tires from China." The commission's recommendation is for three years of increased duties on the tires: The first year's duty would be 55 percent of a tire's value; it would decline to 45 percent in the second year and to 35 percent in the third year. "In our opinion, these tariff levels would remedy the market disruption that we have found to exist," the four commissioners who voted for the tariffs said in a statement. But the commissioners who voted against the recommendation said, "Implementing a trade restriction would be far more likely to cause market disruption than to alleviate it." They said global downsizing in the industry would likely continue despite the commission's action and that the U.S. government should be prepared to assist tire workers who lose their jobs. U.S. workers lost jobs The case was brought by the United Steelworkers union, which claimed that U.S. tire imports from China increased by 215 percent from 2004 to 2008. In that same time period, the union said, more than 5,000 workers in U.S. tire plants lost their jobs. Among the plants cited by the union was the Bridgestone/Firestone plant in Oklahoma City, which closed in 2006. Cole cited that plant's closing in his testimony to the commission. But GITI Tire Investment Co., the largest tire maker in China, said the Oklahoma City plant closed because of a decision to stop making low-cost tires. GITI said U.S. tire makers as a whole had dropped production of low-cost replacement tires to focus on premium tires, which are more profitable. Vic DeIorio, executive vice president of GITI Tire, said Monday that the remedy recommended Monday wouldn't help U.S. workers. "Rather, the result will be that American tire manufacturers will continue to focus on premium tires, as they have said they will do," Delorio said. "If there is a barrier placed on tires produced in China, U.S. manufacturers and distributors will simply increase importation of tires from other countries, such as Venezuela. What's more, duties will result in higher tires prices for American consumers at a time when they can ill afford it." But the steelworkers union applauded the action. Leo W. Gerard, the union's international president, said, "It is time for the promise of enforcing U.S. trade laws to be fulfilled." Both sides said they were looking forward to working with the Obama administration as the president weighs a final decision.