CITAC Voices Concern Over U.S.Penalties For Chinese Tires

The U.S.-based Consuming Industries Trade Action Coalition is urging the Obama administration to consider the impact on U.S. manufacturers of the U.S. International Trade Commission's proposed tariffs on tire imports from China.

ITC recently recommended that tariffs be imposed on tires from China of 55% in the first year, 45% in the second year, and 35% in the third year. The tires at issue are pneumatic rubber tires manufactured in China and intended for use on lightweight vans, trucks, sport utility vehicles, and other lightweight classifications of motor vehicles.

According Lewis Leibowitz, CITAC counsel and a partner at Hogan & Hartson LLP, in deciding whether to follow the ITC's recommendation, President Obama needs to consider the potentially devastating impact of punitive tariffs on U.S. automakers who are already facing the worst economic situation in the industry's history.

Eugene Patrone, the executive director of CITAC added that not only will imposing penalties drive more auto-related manufacturing jobs out of the USA and threaten to undo much of the administration's hard work to revive the auto industry, it will also invite a wave of similar Section 421 petitions to be filed in the future, placing U.S. downstream industries at a significant disadvantage compared to firms overseas who make competing finished products.

The ITC's recommendation comes in response to a petition put forth by the United Steelworkers of America under Section 421 of U.S. trade law, the China Safeguard Investigations provision. Under Section 421, petitioners may request the government to determine whether imports of a product from China are being imported into the United States 'in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products.'

While the ITC makes a recommendation on remedies, the final decision rests with the President.

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