Tire tariffs disappear in one year; or will they?
On Sept. 26, 2011, the three-year tariff on Chinese consumer tires imported to the United States will drop from 30% to 25%. An extra 5% toward the bottom line should make manufacturers and dealers alike happy.
Just think, then, what they will feel when on Sept. 26, 2012, the tariff is completely removed (that doesn't count the natural 4% duty on all the tires imported from China). Will they be downright giddy?
According to one industry veteran, there will be a price war like you wouldn't believe. Manufacturers certainly wouldn't like that.
There also is the possibility that the tariff will be reinstated. It will be an election year, afterall.
Modern Tire Dealer editor Bob Ulrich looks at the issue in his latest B.O.B. blog, "Will there be a price war when the tariffs on Chinese consumer tire imports are eliminated?" He also invites readers to weigh in on the subject by leaving comments, so let us know what you think!