Kirk: Why tariffs were necessary -- and how they were determined
Why did President Barack Obama impose substantial tariffs on consumer tire imports from China? According to United States Trade Representative Ron Kirk, the White House was fulfilling a "trade enforcement pledge."
(For more information on the See “President sets first-year tire tariffs at 35%.)
In a press release issued from Washington, D.C., on Sept. 11, Kirk explained the government’s position. Here is the body of the release in its entirety.
Following an announcement by the White House, United States Trade Representative Ron Kirk released the following statement today on the U.S. decision to impose remedies under Section 421 of the 1974 Trade Act to stop a harmful surge of imports into the U.S. of Chinese tires for passenger cars and light trucks. Following what the ITC determined was a surge, production of similar products in the U.S. dropped, domestic tire plants closed, and Americans lost their jobs. Today's steps are designed to level the playing field for American workers in the tire market.
The three-year remedies, consisting of an additional tariff of 35 percent ad valorem in the first year, 30 percent ad valorem in the second, and 25 percent ad valorem in the third year, are being imposed after a finding by the United States International Trade Commission that a harmful surge of imports of Chinese tires disrupted the U.S. market for those products. President Obama also announced today that Trade Adjustment Assistance will be targeted to help affected workers, industries, and communities immediately, while tariff changes take effect.
"When China came in to the WTO, the U.S. negotiated the ability to impose remedies in situations just like this one," said Kirk. "This Administration is doing what is necessary to enforce trade agreements on behalf of American workers and manufacturers. Enforcing trade laws is key to maintaining an open and free trading system."
The ITC's finding of disruption in the U.S. tire market was accompanied by a recommendation of an additional tariff for three years. The amount of the three-year tariff announced today was set through the use of an economic model developed on an interagency basis, incorporating key characteristics of the global tire industry to arrive at tariff levels that could provide the desired and necessary relief.
"These remedies are a necessary response to the harm done to U.S. workers and businesses, designed to achieve the objective of curbing what the ITC determined was a harmful surge of Chinese tires into the U.S. market," said Kirk. "China is America's second largest trading partner, and the health and strength of our relationship are very important to both countries. We consulted with China as allowed for under the WTO. This decision has been based carefully on America's rights under WTO rules, namely China's accession agreement, and on sound economic calculations."