July 16, 2014
New tariffs on tires: We are 1-step closer
The United Steelworkers union (USW) has won round one in its fight to increase tariffs on consumer tire imports from China.
On June 15, the United States Department of Commerce (DOC) announced it had initiated investigations into dumping (sold at less than fair value) and subsidizing (i.e., tires benefiting from government subsidies) claims by both the USW and AFL-CIO. The imports being targeted by the unions are passenger and LT tires imported from China.
What happens next? Under the applicable statute, the U.S. International Trade Commission (ITC) will make a preliminary determination within the next 25 days. (At this time, the ITC is scheduled to make its preliminary injury determinations on August 1, 2014, but it is permitted additional time under the applicable statute.)
If the ITC determines there is “a reasonable indication that imports of certain passenger vehicle and light truck tires from China materially injure, or threaten material injury to, the domestic industry,” the DOC says it will:
1. make its preliminary countervailing duty determination on the subsidy issue in September 2014;
2. make its preliminary antidumping duty determination on the fair value issue in December 2014.
The deadlines are fluid, because statutory deadlines can be extended.
According to the DOT, the antidumping and countervailing duty laws “provide U.S. businesses and workers with a transparent and internationally accepted mechanism to seek relief from the market-distorting effects caused by injurious dumping and unfair subsidization of imports into the United States, establishing an opportunity to compete on a level playing field.”
There is a 4% duty, or tariff, on consumer tire imports from China. For more on the potential consequences of increasing the duty, read, “If tire tariffs are implemented, tire prices will rise again.”