Obama administration slaps hefty import tariffs on Chinese-made tires
The aggrieved parties are: the United Steelworkers and the U.S. government on one side, Chinese tire companies and the Chinese government on the other. The issues are, as always, jobs and money. The Steelworkers brought a case against Chinese tire companies for dumping tires on the U.S. market over the past few years and in the process putting more than 5,000 people out of work and closing seven domestic tire factories. The case was ruled on by the U.S. International Trade Commission, which found in favor of the Steelworkers. In response, the current administration plastered a 35% tax on Chinese passenger car and light truck tires.
Naturally, the Chinese are miffed, to say the least. They feel the tariff is contrary to World Trade Organization rules and President Obama's rhetoric on current tariff levels, as well as being a tactic of undue protectionism. When China entered the WTO, the U.S. specifically negotiated the right to protect itself against a sudden wave of Chinese goods, and the ITC feels that China's share of the tire market having grown 14% in four years, with 31 million more tires entering, is just such an occasion.
Politics could be the decider in this one, however. China can complain to the WTO, attempt to impose its own countermeasures, or at the upcoming G-20 meeting it can simply whisper in Obama's ear, "You know that $1.56-trillion-and-counting deficit you guys need floated..." Nobody wins in the case of escalation, but we have a feeling the fight isn't yet finished.
[Source: Wall Street Journal | Photo: Mark Ralston/AFP/Getty Images]
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Reader Comments (Page 1 of 6)
Corey L 2:03PM (9/14/2009)
This comment has nothing to do with the post, but that pic just begs for captioning.
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yacoub 2:14PM (9/14/2009)
"Trapped in tire factory, send help"?
Benfolio 3:38PM (9/14/2009)
Oh, but "Chocolate Jesus" was funny. I'm disappointed in yous.
happyfun86 2:09PM (9/14/2009)
While I usually don't like to get into politics, you're kinda right. The US isn't really in the best position to be antagonizing China. I mean, I don't think China would take any drastic action against the US for this, but this definitely isn't gonna do anything to help our relations with them.
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BoxerFanatic 2:12PM (9/14/2009)
Fair trade, being a good goal, is a hard thing to diplomatically acheive, when you owe more money than you make to the other negotiating party.
Jacking up tariffs are going to piss them off, raise prices here (just as automotive maintenance is on the rise, as more people keep cars longer.), and not going to cut costs for people to do business in the US.
This doesn't necessarily mean more US-made tires. It could mean fewer tires available altogether, because just making chinese goods more expensive to American customers, doesn't mean that it is price effective to build those products here with regulation and taxation.
The question is, is this just the beginning, like Smoot-Hawley Tariff Act of 1933, that kicked off the main stagnation of the great depression. (where most of the world otherwise just had a depression for a couple years in the early 30s, the US stagnated up to the necessity of WWII. And we were not the debtor nation then that we are now.
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Edsel 2:34PM (9/14/2009)
Kudos to you, Boxer! You get it.
So few politicians look to the past for answers. So many of them tell us "not to dwell upon the past" because they need to "move the nation forward". I guess we are doomed to forever repeating the past...
BoxerFanatic 3:51PM (9/14/2009)
You know what they say...
"Those who know not history, are doomed to repeat it."
The sad thing is, that they are in charge, and dragging us ALL back there.
I have said for a while that Bush and Obama are trying to do their best impersonations of Herbert "Chicken in every pot" Hoover, and Franklin "New Raw Deal" Roosevelt.
R and D don't really much matter when they are both headed outbound from the basis of politico-economic freedom.
Holden Miecranc 4:02PM (9/14/2009)
Boxer is dead on. This is Obama pandering to the steelworkers union who pushed for the tariff and it puts our economy further in jeopardy.
Wobbly_ears 2:13PM (9/14/2009)
Chocolate Jesus??
What a sad sight to see racism alive & well in this country.
What a pity.
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geo.stewart 2:13PM (9/14/2009)
funny that China is screaming protectionism, considering their history. The only time they allow anything in is when they need enough samples to copy the technology.
and any whispers about calling debt due would cause a house of cards to tumble on both sides of the pacific pond, not just ours.
However, i doubt obama lama has the chops necessary to play a game of chicken with the die hard politicians in china
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len simpson 2:14PM (9/14/2009)
It would be simpler for China to make better tires. Cheap labor shouldn't equal poor quality. Remember MADEINJAPAN ?
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Edsel 2:44PM (9/14/2009)
Yes, I remember very well the derogatory "Made in Japan" insult and then look what happened! While we were all snickering about shoddy manufacturing, Japan devoured our consumer electronics industry and they have fairly decimated our auto industry too.
China is now producing products of incredible quality at a lower price.
dukeisduke 2:47PM (9/14/2009)
I agree. I wouldn't put their crap tires on any of my vehicles. Car and Driver did a recent comparison test of nine low-cost, high-performance tires (compared against the Michelin Pilot Sport PS2), and the Chinese tires (the Ling Long L688) came in dead last, by a wide margin:
http://www.caranddriver.com/reviews/comparisons/09q2/tire_test_nine_affordable_summer_tires_take_on_the_michelin_ps2-comparison_tests
Redline 3:17PM (9/14/2009)
I wanted to quote the same tyre test, you get what you pay for.
Jake 3:30PM (9/14/2009)
Speaking as an engineer who's products are manufactured in China, I personally will pay extra for a product that is not made in China and does not have Chinese quality.
len simpson 3:35PM (9/14/2009)
thank you Jake
leather bear 3:48PM (9/14/2009)
@dukeisduke and redline:
What thouroughly blew me away about the utter craptitude of the LingLong tires in the C/D test was that they were worse in the dry in a number of tests than other tires were in the wet. Driving on a set of the LingLongs would be like being stuck in a 24/7 virtual rainstorm whenever you got behind the wheel.
Although there may be other Chinese tires that would have done better, either LingLong is very cynical when comes to performance/safety issues, or their engineers are completely inept at tire design. I'll stick with one of the other brands in the test.
imoore 4:51PM (9/14/2009)
I remember that article. And cheap doesn't always mean better. I can remember about two years ago when I had some new tires put on my car, and I wondered why they were riding so rough. I looked at the tires, they seemed in good shape, but then I noticed the name "GOOD RIDE" and the tag line MADE IN CHINA. I went back and demanded the tires be replaced, and they did.
This brings up another point: If you really don't want these tires, always demand the brand you want to buy, or you'll get stuck with crap rubber. It's your life and your passenger's life that are at stake when you hit the road.
the4thheat 8:54PM (9/14/2009)
Just because the homegrown Chinese tire wasn't a great performance tire doesn't mean that China isn't capable of manufacturing decent tires. Tire engineering is pretty complex stuff, and Michelin has about a century's ahead start on the Chinese.
But as far as manufacturing goes, the Chinese are capable of making top notch quality products-it might not be homegrown designs just yet but those Audi's built in China aren't pieces of crap, and Michelin makes tires in China as well.
So when we're talking about tires from China they don't just include homegrown brands.
And to be completely honest if you read the actual test yes the Ling Longs did bad compared to established high performance tire brands but the actual numbers aren't actually that bad for a BUDGET tire. A skidpad of 0.88 isn't the greatest in the world but it's not a terrible performance.
It might have come in last but it tied Yokohama in the dry test and while last place in the wet test it wasn't really that far behind the lower ranked major players. Would I buy them over any of those other tires? Hell no, but then again I don't consider it a high end performance tire at all.
You'll notice it also had the absolute least wear of any of the tires, which would actually suggest that they went for a longer lasting regular tire more than a high performance tire design. Which means that they're perfectly capable of making a decent budget tire that'll last quite a long time.
Either way you might as well mock them while you can because I have a feeling in a couple years it'll sound similarly ridiculous to mocking Bridgestone tires.
yacoub 2:14PM (9/14/2009)
I'd actually prefer my tires made somewhere else with better production monitoring and safety.
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