GITI: ITC proposal 'will not help U.S. workers'

While the United Steelworkers union is happy with the recent remedies for Chinese tire imports proposed by the U.S. International Trade Commission (ITC), GITI Tire (USA) Ltd. is not.

(See "Despite no quota, Steelworkers call remedy vote a 'victory,'" June 29, 2009, for more information.)

"We are disappointed that four of the six ITC commissioners today felt compelled to take a decidedly protectionist path and recommended that the U.S. government impose an additional duty against economy tires made in China," says Executive Vice President Vic DeIorio.

"The proposed remedy, if enacted, will not help U.S. workers. Chinese-made tires have filled a market void created when U.S. manufacturers abandoned the economy segment of the mass market."

GITI is a subsidiary of GITI Tire Corp., one of China's largest tire manufacturers.

"The duty will not have the effect of increasing domestic production of low-cost tires -- it simply will not help U.S. workers," says DeIorio. "Rather, the result will be that American tire manufacturers will continue to focus on premium tires, as they have said they will do.

"If there is a barrier placed on tires produced in China, U.S. manufacturers and distributors will simply increase importation of tires from other countries, such as Venezuela.  What's more, duties will result in higher tires prices for American consumers at a time when they can ill afford it."

DeIorio says the ITC should have directly addressed complaints about foreign labor and environmental standards and fashioned a recommendation for the administration that moves the Chinese tire industry as a whole to improve labor and environmental standards in their manufacturing facilities.

Four of the six commissioners proposed duties on the tires of 55% the first year, 45% the second year and 35% the third year at 35%. Two commissioners echoed the view that duties would do more harm than good.

The ITC decision is not binding. President Barack Obama has until September to make a final decision on the proposed remedy.

Delorio says the administration has a broader set of responsibilities, and a wider vantage point to devise a successful solution in this case that actually helps U.S. workers.

"Building a bridge of innovation to the future rather than a road of protectionism to the past is the way in which the administration can best ensure the industry's future."