Bob Ulrich

Editor

Bob Ulrich was named Modern Tire Dealer editor in August 2000. He joined the magazine in 1985 as assistant editor, and has been responsible for gathering statistical information for MTD's "Facts Issue" since 1993. He has won numerous awards for editorial and feature writing, including five gold medals from the International Automotive Media Association. Bob earned a B.A. in English literature from Ohio Northern University and has a law degree from the University of Akron.

» More

President Obama announces tariffs in the dark of the night

By: Bob Ulrich

Late Friday night? Really? President Barack Obama decides to announce his imposition of strict tariffs on Chinese consumer tire imports after business hours on Friday, entering the weekend?

Talk about trying to bury any furor surrounding the decision. The president had until Thursday, Sept. 17, to decide on what to about escalating passenger and light truck tire imports from China. Admittedly, it was a hot button issue, one with potentially serious ramifications.

On one side, he faced the United Steelworkers (USW), which supported his march to the presidency. The union claimed that the considerable increase in Chinese consumer tire imports -- more than 200% over the last five years -- resulted in the loss of thousands of jobs and the closing of six tire plants in the United States.

On the other side, he faced China, which owns an awful lot of our debt. Chinese concerns were publicly against any additional tariffs, which they viewed as unwelcome protectionism. (The general rate of duty on radial passenger and light truck tires is 4% of the U.S. Customs value.)

Each side had its supporters. If the tariffs imposed on Chinese consumer tire imports was too high, bringing them into the country would be cost-prohibitive. That’s what the American Coalition for Free Trade in Tires believes.

Members of the coalition represent almost all the segments of the retail tire market in the U.S.: tire dealers, private brand manufacturers, import brokers and marketing arms of Chinese tire manufacturers. No domestic tire manufacturers were members of the commission, although Cooper Tire and Rubber Co. (two plants) and Toyo Tire Holdings of Americas Inc. (one plant) had issued statements opposing additional tariffs.

So, where does everybody stand following the president’s decision to impose additional tariffs of 35% (first year), 30% (second year) and 25% (third year)? He didn’t follow the U.S. International Trade Commission’s respective proposals of 55%, 45% and 35%, but my guess is that opponents of those proposals won’t be appeased.

GITI Tire (USA) Ltd., a member of the American Coalition for Free Trade in Tires, already has sent out its official statement of disappointment.

“This decision will cost many more American jobs than it will create,” said Vic DeIorio, GITI's executive vice president. “It will also increase costs for, and take away choices from, American consumers.”

In talks with other tariff opponents prior to the president’s decision, I got the impression that they were against unreasonable tariffs. Jim Mayfield, president of Del-Nat Tire Corp., said he could live with a 6% to 8% increase.

Another tire industry executive told me an increase "in the teens" would not hurt this company too badly. He added that he wouldn’t be shocked if the president settled on 25%.

As you might expect, the USW is quite happy with the result.

In an official statement, USW International President Leo Gerard praised the president for standing with American workers.

"This is an important day for all American workers -- especially the thousands of tire industry workers whose jobs were on the line as a result of a huge surge in Chinese tire imports that began in 2004,” he said.

“This decision means a better deal for hardworking American men and women and the millions of manufacturers, farmers and ranchers, and service providers who ask only for a chance to compete on fair terms.”

Does it really mean a better deal for all American workers? Will there be a net increase or decrease in jobs? Time will tell us -- hopefully with respect, straight to our faces.

Related Topics: Chinese tire imports, GITI Tire, International Trade Commission, President Obama, Private brand tires, USW

comments

1. Thomas | September 14, 2009 at 06:40AM
   Tire wars: Another Big Labor payoff that will cost American jobs (http://michellemalkin.com/2009/09/14/tire-wars-another-big-labor-payoff-that-will-cost-american-jobs/)

2. Paul | September 14, 2009 at 03:54PM
   
   
   I have just received a copy of the press release from the White House and have a question as to your interpretation of the following from Par. #2 of the Presidents Proclamation. "or withdrawn from warehouse for consumption". Which warehouse is he talking about? Hopefully he is not talking about the warehouses of tire dealers here in the United States.
   
   

3. chuck | September 14, 2009 at 04:25PM
   Does this slow down imports from other countries?

4. Phil | September 15, 2009 at 06:34AM
   Obama just paid back the USW in hopes of gaining USW support for his health care plan. He has no concept of the real world.

5. Kevin | September 15, 2009 at 07:50AM
   Phil...I have to agree. This decision will not only hurt the Chinese, it will also hurt here at home. We owe China a huge debt and this is not going to help relations. It is a way to get the USW on his side just like he did with the UAW. In the end it only benefits him and his agenda. SAD!

6. James | September 15, 2009 at 08:09PM
   I think that if Obama had ever been to Main Street without the secret service, he would know that the people who are buying low cost "Chinese" radials don't need to spend any extra money. He might also hear a level headed American say that the low cost radials will just come from another country that may not offer a good quality product like Chinese plants do. Personally I would rather not have low cost product suppliers bouncing all over the world producing products that ensure the safety of virtually all Americans.