Tariffs on Chinese Tires Will Hurt U.S. Consumers: Producers

A Chinese delegation of tire producers warned Wednesday that the proposed U.S. tariffs on Chinese tire export will hurt the American consumers and cause job loss as well.

"We have filed much evidence demonstrating that Chinese tire imports do not injure the U.S. tire industry," the delegation said in a letter to U.S.

President Barack Obama before a government hearing on this issue on Friday.

"The restriction of the Chinese tires cannot solve any problem faced by the U.S. tire industry, and it would hurt U.S. tire distributors and consumers," it said.

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 to impose a 55-percent tariff on the Chinese tire imports that 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 tire has not disrupted the U.S. market at all since our products are relatively lower ended and mainly for the replacement of tires," Xu Youming, a representative of Chinese tire producers told Xinhua, "The U.S. tire makers do not produce these types of tires."

"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 Mary Xu, deputy secretary general of the China Rubber Industry Association, who led the delegation to Washington.

The ITC said it submitted an 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, and the president is supposed to make a decision within 15 days after receiving it.

The U.S. trade authorities said Wednesday that this case is seen as a test for Obama'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 on Tuesday.