Manufacturing News

Obama to decide on Chinese tire imports this month

U.S. union workers expressed confidence on Wednesday that President Barack Obama would restrict tire imports from China, as a 15-day countdown began for Obama to make his decision in the closely watched case.

"President Obama will have the opportunity to let American workers know he will stand with them when trade distorting practices from China threaten American jobs and our industries," Leo Gerard, president of the United Steelworkers Union said in a statement.

"We are confident the president shares our values of promoting a rising standard of living for the American worker. This trade case gives him the chance to put into practice his pledge to level the playing field and give all Americans a chance to share in the benefits of balanced trade," he said.

The Steelworkers endorsed Obama during last year's presidential campaign, helping him win a hard-fought race with rival Hillary Clinton for the Democratic party's nomination.

Both opponents and supporters of restrictions have called the case a key test of Obama's approach to trade in the face of conflicting pressures to protect jobs and promote free trade.

The U.S. Trade Representative was due to give Obama its recommendations in the tires case on Wednesday. That begins the final stage of deliberation in which Obama is required under U.S. trade law to announce a decision within 15 days.

U.S. tire imports from China totaled about 46 million in 2008, or triple the 15 million in 2004.

The White House will have no comment on case until Obama announces his decision, a White House spokesman said.

Opponents of the relief said U.S. tire manufacturers like Bridgestone/Firestone, Goodyear , and Cooper made a decision years ago to get out of the low end tire market that China supplies and have no intention of returning to it.


An attorney for Chinese tire producers said it would be "downright protectionist" for Obama to impose restrictions at a time when imports of the tires have already dropped.

"Tire imports have fallen 10 percent this year and not a single (U.S.) tire company supports this petition," said David Spooner, a lawyer with Squire Sanders.

The Emergency Committee for American Trade, a U.S. business group, has warned Obama risks "creating a downward protectionist spiral that will hurt millions of American workers" if he imposes import curbs.

An economic analysis done for U.S. tire wholesalers and retailers estimated the United States could lose 25,000 jobs if Obama restricts imports of the low-priced tires, a figure the steelworkers say is exaggerated.

The Steelworkers Union, which represents workers at several U.S. tire plants, requested the relief under Section 421 of U.S. trade law, which specifically allows the White House to curb surging imports from China.

It is only the seventh petition filed under the anti-surge mechanism, which China accepted as a term of its entry into the World Trade Organization in 2001.

Former President George W. Bush turned down four petitions that reached his desk and the U.S. International Trade Commission rejected two others.

In the tire case, the ITC voted 4-2 that a surge in imports from China threatened to disrupt the U.S. tire industry.

It recommended a three-year program of import relief, beginning with a 55-percent tariff in year one that would fall to 45 percent in the second year and 35 percent in the third.

Obama promised last year in a letter to a textile industry group to decide Section 421 cases "on their merits, not on the basis of an ideological rejection of import relief like that of the current administration."

However, if Obama decides to provide relief, he is not bound to follow the ITC's recommendation. Chinese manufacturers argue any tariff would cut off imports because of low profit margins. That might lead Obama to impose quota restrictions.

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