Manufacturing News

U.S. section 421 case causes concern among Chinese tire makers

Chinese exporters of passenger vehicle and light truck tires have reacted with alarm to a petition filed by America's United Steel Workers (USW) labor union, seeking to limit the import of their products under Section 421 of the U.S. Trade Act.

"We will definitely be affected if it goes through" said an executive at the Shandong Lingling Rubber Co. "Our export volume will come down a lot." 
The USW filed its petition on June 2. On June 18, the United States International Trade Commission (USITC) ruled in favor of the union. It plans to send a remedy proposal to the Obama administration later this month.
Many Chinese tire makers depend on America for their main business.
Shandong Lingling, for example, exported 3 million tires to the United States in 2008. According to the executive it has responded by looking for new markets in Africa.
A second tire maker, Sinotyre International Co., has halted shipments to the United States indefinitely.
"We are keeping in close contact with our people in North America—just waiting for news," said Sinotyre's general manager Steven Cui.
"From our situation we can do nothing. We just have to adjust our production plans. We just have to keep the ball rolling," he added.
Tire exports from China to the United States are generally made by smaller manufacturers selling on to the aftermarket.
Because of this, larger tire makers are less affected by the ruling. At Goodyear Rubber and Tire Co., for example, global communications vice president Roger Rydell says virtually all of the tires his company makes in China are sold in the Asia Pacific region.
Section 421 of the U.S. Trade Act is a temporary country-specific safeguard that China agreed to as part of its bilateral trade negotiations with the U.S. leading to its 2001 membership in the World Trade Organization.
The USW claims that in 2008 China exported nearly 46 million consumer tires to the United States with a total value of more than $1.7 billion.

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