Manufacturers refuse to choose

Only Cooper, Toyo took sides on tariff issue

By: Bob Ulrich

“Pricing is based on what we believe is the value of the product,” says Michelin North America CEO Dick Wilkerson. “Will stress (in the U.S.) market increase the value of the product? I’m not sure of that.”

Nearly all of the tire manufacturers outside of China were non-committal while the consumer tire import controversy played itself out. Many released statements, but they said little and refused to take sides, even after the final decision was announced.

They all believe in “free and fair trade” with China, but apparently that phrase is open to interpretation depending on the company. The United Steelworkers (USW) deemed the 215% increase in Chinese imports from 2004 through 2008 unfair. So it petitioned the United States International Trade Commission (ITC) for relief.

Only Cooper Tire & Rubber Co. and Toyo Tire Holdings of Americas Inc. took stands. They were against the additional tariffs on Chinese tire imports as outlined by the ITC.

In statements to the U.S. Trade Representative, Cooper abandoned its neutral stance, and was critical of the ITC’s proposal to increase tariffs 55%, 45% and 40%, respectively, over a three-year span.

“The high tariff remedy is not reasonable or rational,” it said. “Such a high tariff would prohibit Cooper Tire from importing any tires from the People’s Republic of China. The added costs of the duties (light vehicle tire imports from China already were being taxed 4%) would make any such imports economically unfeasible.”

President Barack Obama ultimately reduced the recommended tariffs, which he imposed exclusive of each other, to 35%, 30% and 25%. It remains to be seen if the “reduced” tariffs also will prevent Cooper from importing tires from China.

“Cooper’s priority is to continue to meet customers’ needs while balancing the reality of these new business challenges,” said the company following the president’s decision. “The company will act quickly and appropriately to this decision as contingency planning has been under way.

“We are currently assessing our options and will keep all stakeholders informed of decisions as appropriate.” To date, those decisions include announced production expansions at two of its three domestic tire plants, all of which are unionized.

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Related Topics: Chinese tire imports, Cooper, International Trade Commission, Tarrifs, Toyo

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