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President sets first-year tire tariffs at 35%

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President sets first-year tire tariffs at 35%

Additional tariffs of 35%, 30% and 25%, respectively, have been imposed on Chinese consumer tire imports for the next three years. The 35% tariff will go into effect for 12 months beginning Sept. 26, 2009.

President Barack Obama's decision to levy the tariffs was reported by Reuters late Friday night. They will be added to the general rate of duty on radial passenger and light truck tires, which is 4% of the U.S. Customs value.

As reported by Reuters, White House spokesman Robert Gibbs, in a statement, said President Obama "decided to remedy the clear disruption to the U.S. tire industry based on the facts and the law in this case."

China " denounced the decision," according to Reuters. So did GITI Tire (USA) Ltd., a subsidiary of GITI Tire Corp., one of China's largest tire manufacturers.

“We are deeply disappointed by President Obama’s decision to impose a tariff on Chinese-made tires," said Vic DeIorio, GITI's executive vice president. "By taking this unprecedented action, the Obama administration is now at odds with its own public statements about refraining from increasing tariffs above current levels.

“This decision will cost many more American jobs than it will create. It will also increase costs for, and take away choices from, American consumers.”

The United States International Trade Commission (ITC), in response to a petition filed April 20, 2009, by the United Steelworkers union asking for limits on Chinese consumer tire imports, proposed that duties on the tires be increased by 55% the first year, 45% the second year and 35% the third year.

Close to 47 million consumer tires were imported from China in 2008, up more than 200% since 2004.

The USW was pleased with the decision.

"When the USW filed its trade case, it asked that relief be provided in the form of quotas," said USW International Vice President Tom Conway. "The International Trade Commission agreed with the USW's view as to the nature of China's surging exports, but decided that relief in the form of tariffs would best respond to China's actions.

"Despite imposing a different remedy than recommended by the ITC, we are optimistic that the step taken by the President will provide real, effective relief," added Conway.

For more background information, check out "Here's how tariffs on Chinese tires will affect tire dealers."

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