The Chinese tariff decision, six months later

Private brand marketers adjust to the fall-out. Supply, pricing remain big issues

By: Mike Manges

Some companies “have not been able to pass on all of the increases” associated with the tariff, says Bill Trimarco, CEO and president of Hercules Tire & Rubber Co.

They said a tariff on Chinese-made tires would disrupt the supply chain. They said a tariff would drive up prices and force their companies to seek products elsewhere. They said a tariff would place an unnecessary burden on low- and middle-income vehicle owners who can’t afford to buy high-end tires.

More than six months after the White House levied a 35% tariff on certain Chinese-manufactured passenger and light truck tires, all of the above predictions have come to pass, according to several private brand tire marketers.

“We’re still recovering,” says Jim Mayfield, president of Del-Nat Tire Corp.

Here’s a look at how private brand tire companies Hercules Tire & Rubber Co., SURE Tire Co. and Del-Nat have adjusted — and continue to adjust — to a post-tariff world. Looking forward, is the glass half full or half empty?  Top executives from all three companies certainly have a lot to say about the situation.

‘An economic discussion’

Hercules CEO and President Bill Trimarco says the tariff decision was unnecessary.

“The Chinese didn’t break any rules. The U.S. government decided that the tariff should happen. This was no fault of the Chinese.”

The ironic twist, he says, is that when Hercules evaluates the risk of doing business with a supplier in a foreign country, “normally we focus on what that country might do to us. We don’t focus on what our own government will do to us!

“For most people, (the tariff) is not a political discussion; it’s an economic discussion. When you have the government picking winners and losers, there are going to be winners and losers. The tire industry has been hurt by this. The consumer has been hurt by this.”

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Related Topics: Chinese tariffs, Del-Nat, Hercules, Private brand tires, SURE Tire

comments

1. john | June 01, 2010 at 06:48PM
   Very nice story Mike. Quite thorough. I was wondering what kind of impact the tariff had had, and your story provided many answers.

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