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Trade alliance, TBC comment on possible tariffs

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Trade alliance, TBC comment on possible tariffs

More industry participants are voicing their opinions as the deadline for President Barack Obama's decision on Chinese consumer tire imports draws near.

To recap: The International Trade Commission (ITC), in response to a petition by the United Steelworkers, has proposed that duties on the tires be increased by 55% the first year, 45% the second year and 35% the third year. By the end of the third year, the ITC implies, the market will be back to normal, so no additional tariffs will be needed.

The president has until Sept. 17 to decide whether or not those tariffs -- or any tariffs, for that matter -- will be necessary.

The Trade Alliance to Promote Prosperity has created an online petition (www.protecttrade.org) that urges the president "to reject destructive, unnecessary tariffs against Chinese tire manufacturers."

The letter reads as follows.

Dear Mr. President:

We the undersigned strongly urge you to reject the U.S. Trade Commission’s recommendation under Section 421 of the 1974 Trade Act that you impose a three-year tariff (55%-45%-35%) on Chinese-made passenger tires imported into this country.

China is a friend and valuable partner on a wide range of energy, environmental, foreign policy and bi-lateral security initiatives vital to America’s national interests. Igniting a destructive trade war with our largest trading partner and investor will not bring back a single lost job in an entry-level tire manufacturing segment that left the U.S. years ago and can never be profitable here.

Rather, such a trade war will cost thousands of U.S. manufacturing jobs and jobs on West Coast ports, devastate a rural economy that depends on commodity exports to China, and jeopardize your entire program of domestic initiatives, particularly health care reform.

For all these reasons, Mr. President, we respectfully urge you once again to reject proposed Section 421 sanctions against our friend and partner, China.

More than 1,000 names were on the list as of Thursday morning (Sept. 10).

In a letter to Ambassador Ron Kirk, who heads up the Office of the U.S. Trade Representative, dated July 27, 2009, TBC Corp. CEO and President Larry Day addressed general comments on the ITC's proposal. (Kirk turned in his own recommendations to the president in early September.)

"Application of these significant tariffs to all subject imports from China unquestionably creates an abolute and insurmountable financial barrier to virtually any importation of the subject tires from China," he wrote.

"All those who did import subject tires from China, including TBC, have already made alternative plans at very significant cost to replace their China imports based on the threat posed by the ITC's tariff recommendations. The manufacturers of subject tires are already implementing plans to move their production of U.S. imports to other countries and to redirect any remaining China production for resale to other countries."

According to Day's letter, TBC was "not in position" to make specific recommendations as to either what remedy the president should impose, or what diplomatic solution should be sought.

"What is clear to TBC is that, whatever relief is finally determined to be appropriate, it should not be punitive," and it should take into account "the interests of all of the affected parties."

For a different viewpoint on this controversial issue, click on the following link to Modern Tire Dealer Editor Bob Ulrich's blog, "Tariffs: the 5% solution."

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