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July 24, 2014

Chinese tire tariffs may surpass 60%

Would you believe a 60% tariff? That is a possibility, according to a report by Exane BNP Paribas.

On July 22, 2014, the United States International Trade Commission determined consumer tire imports from China may or may soon be "materially" injuring the domestic tire industry. 

The decision begins a process that may lead to a 60% additional tariff, "plus 26% punitive tariffs," according to Exane. "The Chinese Rubber Industry Association has said that should this materialize, it would be impossible to import tires from China, and that it would demand the Chinese government take countermeasures."

The tariffs would be in addition to the 4% duty already in place on consumer tire imports from China.

Tire manufacturers have been mum on the subject of possible tariffs. Exane believes Groupe Michelin would benefit from additional tariffs.

"The possible re-introduction of U.S. tariffs on China-made tires could result in a 1-2% tailwind to Michelin's EPS (earnings per share), while highlighting its dependency on low profitability and price-driven, entry-level tires."

Michelin was affected negatively when the tariffs imposed on passenger and light truck tire exports from China to the U.S. in 2009 expired in 2012, according to Exane.

"Michelin does suffer from competition from entry-level players, unlike any other European tire maker," says Exane. "As we firmly believe the premium segment is set to structurally grow faster and be more disciplined and profitable, we think Michelin shares deserve to trade at a discount to EU (European Union) peers, and see them as being fully valued currently."

Exane S.A. is an investment firm based in Paris, France. Under the brand name Exane BNP Paribas, Exane says it "provides institutional investors with a range of services, such as research, sale and execution on European equities."

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  1. Tom | July 24, 2014 at 11:23AM
    Last time I checked Michelin was a French company. Who are we really protecting?

    Also,since the last tariff ended, GT, Kumho, Hankook, Goodyear, have all announced new plants being built. The problem isn't American jobs being lost, it's union jobs. As these will be built in "right to work" states creating lots of "American" jobs!

    All this will do is drive up ALL tire prices again. Higher prices are not what this country needs in a still slow economy, just to make a few union cry babies happy.

    And by the way we are up about 10% this year in overall sales. But, we are up over 300% with Cooper / Mastercraft. Most of which are built in the US!

  2. Mike | July 24, 2014 at 02:40PM

    Fact: One in ten cars have at least one bald tire right now, today. President Obama will insure there are many more dangerous tires on US roads by removing the only tires many people can afford from being sold at all. Obama and his cronies are losing union support across the country. By putting high taxes on Chinese tires they hope to gain political points with the steelworkers union during the mid term elections.

    Not that this tax will save many US tire worker jobs. The real prize is that the big tire makers will have less competition and thus more income once Chinese tired are excluded from the marketplace. Those increased profits means unions can negotiate better contracts for themselves. Everybody wins except for consumers who again pay the price for political and economic greed.

    Most people are driving older cars ( average today is eleven years old) because they can't afford a new one. In the same way, most people (especially us single mothers) can't afford mid priced tires, which is likely to become the cheapest tire available to her once 60-80% Chinese tariffs are in place. Obama's new proposed tax on will remove the "economy level" tire from the marketplace,

    A large number of people are struggling to make ends meet will not be able to replace bald tires at all. That's dangerous. Obama et al are surely going to greatly increase the potential for injury, death and destruction to everyone traveling on US roads, even those who can afford more expensive tires.

    This is an issue that demands public outcry. Life has enough potholes without a reckless President making our daily commute an even bigger war zone. Email your congressman and tell them to put a stop to this sham.

  3. JACK | July 24, 2014 at 04:33PM
    If you raise the tariffs on Chinese tires you should also raise the tariffs on all foreign built tires that are imported by the USA.All countries that export items to the USA should also be made to import the same amount from the USA.Fair is Fair,we the citizens of the USA buy to much from other countries that are cheaply made because the workers are paid very little and they don't care about the quality of products made and sold to other countries.

  4. Eric | July 25, 2014 at 08:53AM
    Who pays this tariff? We do, every consumer of tires. The tires that do not have the tax go up because they can. Who pays that raise? We do. They made this mistake before. Stop this insanity. Scream and holler at your political representatives. Get everyone you know to join you.

  5. WALTER | July 25, 2014 at 11:00AM
    how could anybody in their right mind do this to the millions of Americans that are struggling to put food on the table for their family

  6. Bob | July 25, 2014 at 12:07PM
    Who the heck cares about Michelin, they are a foreign company (French) just like the foreign companies in China. The tariff gets passed onto every consumer that buys tires because the tire companies amortizes the tariff across their entire line. Put a tariff on ALL IMPORTED tires, not just the China built tires.

  7. david | July 25, 2014 at 12:26PM
    well well well ,my understanding usw start @$21.00 per hour

    & it goes up from there.if people don't want Chinese products walmart would be vacant.not.let the people decide if they want access to a average style tire compared to a who knows what used tire.i see it every day young people cant afford 2 tires at a time. get them in something that has tread & new compounds.save the children not the union over pd cry babys.david smith Wichita ks maple st tire mart if they want to duel it out.

  8. Richard | July 25, 2014 at 02:04PM
    Why is this story not being run on every major news network across the country? This is NEWS. Maryanne and the professor had sextuplets is NOT.The US has a population of approxamitly 317 million people,75% of that population are tire consumers?? .....If my math is right; that mean 237 million Americans need to foot the bill so that 16,000 USW members in this particular industry can earn more for a job they are already grossly over payed for by nation average hourly wages Standards!

  9. Michael | July 27, 2014 at 05:31AM
    After reading all the comments I feel I must comment. I operate in an area with numerous people on public assistance. I do often see people with bald tires coming into my shop. I refuse to sell them Chinese made c_ _ _. For a few dollars more they can buy a quality tire from a quality manufacturer with a treadlife warranty. Do I think we need additional tarrifs? Yes, I do. 86% is a bit steep though. I think 25% would be better. At that point, Chinese tires would be about the same price as a decent mid-level tire. Most people would buy the mid-level with the warranty instead of the crap without. One other thing, most of the people I deal with on public assistance have brand new cell phones and lots of expensive things which I do not have. They have no problem spending their money on things other than tires or brakes or maintenance. They only fix the vehicle when they must and complain about every dollar. I don't sell the c_ _ _ so they usually go elsewhere. It is far less hassle for me in the long run and my profitability is better.

  10. Alpio | July 28, 2014 at 09:32AM
    Put a tariff on a Michelin tires ...they are a French company and see how they feel ...

    Chinese tires will effect the entry level buyer ...they need something they can afford ...

    Unions are not thinking on this one

  11. Paul | September 03, 2014 at 09:54PM
    Some of the comments reflect on Union workers. Union workers are paid more but are held under extreme quality standards. Union workers care what Americans ride on. They put in hours that the average person would not tolerate. They are away from their families. When the average person is at home at night with there loved ones. Union workers sacrifice quality family time for that so called over pay!

  12. Paul | September 03, 2014 at 09:57PM
    David Smith. You are miss informed on what Union workers make. Do your research! No

  13. Eric | October 22, 2014 at 01:54PM
    Ol stupid is up to his ears in problems and now he wants to screw up the tire importing business too. I'm sick of this administration and all of the people who keep supporting its foolish behavior.

  14. Tire | November 07, 2014 at 04:35AM

  15. Tire | November 07, 2014 at 04:36AM
    China tires are sometimes better than America tires


  16. armond | November 13, 2014 at 06:18PM
    im trying to improt some chinese tires now for my shop and just wanted to know if i get them before jan 2015 and sell them in few months can the gov tax me for these tires.

  17. Daniel | December 04, 2014 at 07:25PM
    There are some cheap tires made in other countries but over all most tires made in China today are very safe just as safe as any other tire as the industry has come full circle. China has done it gracefully with just about everything they make. I remember when everything was made in Japan. It was cheap junk then look a decade later the only quality items were made in Japan. Now it is China's turn. America simply does not make anything anymore. 80% of American tires are also made overseas. Hell Toyota outsources a large percentage of it's cars to be made in China today. You just have to do some research on quality before you buy.

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