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Tariffs on Chinese consumer tires will continue

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On Dec. 13, 2010, the World Trade Organization (WTO) dismissed a complaint against tariffs imposed on Chinese consumer tire imports by President Barack Obama last year. That keeps the current 34% tariff intact.

(Both sides of the conflict have the right to appeal the panel's findings to the WTO Appellate Body within 60 days.)

The original decision went into effect Sept. 26, 2009 (see "President sets first-year tire tariffs at 35%").

Two organizations have publicly commented on the WTO's reaffirmation of the decision, one "for" and one "against." Here are excerpts from their releases.

Tire Industry Association (TIA): Against the decision

TIA wrote that it is disappointed in the decision. TIA also reiterated its call for United States Trade Representative (USTR) Ron Kirk to establish a comprehensive, independent, verifiable system for quantifying the effects of the tariff.

"Backers of this tariff claim that it will protect American tire manufacturing jobs, whereas TIA believes there is no reliable data to support claims that the tariff has actually protected these jobs; it has only harmed American tire dealers, wholesalers and ultimately, the consumer."

“We are hopeful that the WTO appellate hearing panel will see that this tariff is misguided and ineffective; that it has not saved American tire manufacturing jobs; and has only hurt American consumers at a time when they can least afford it,” said TIA Executive Vice President Roy Littlefield.

“It is no secret that since this misguided tariff took effect last year, most tire manufacturers have raised their prices, and we know of no U.S. tire manufacturing jobs that this tariff has been proven to have saved. As a matter of fact, we would urge USTR Kirk to engage TIA members to learn firsthand the effect these tariffs have had on the American motorist.

"Our message to Mr. Kirk is simple: All you have now are competing opinions, and that’s no way to administer a critical trade issue. Set up a fair, independent and verifiable system to discover the true effectiveness of the tariffs.”

United Steelworkers (USW): For the decision

The USW applauded the decision by the WTO

"The USW has never shied from using every tool we have available to fight for fair trade and to fight for our members' jobs," said USW President Leo Gerard. "Today's decision confirms that the rules of trade, when vigorously enforced, can be made to work for working people.

"When President Obama imposed the tariffs on Sept. 11, 2009, he became the first president to provide trade relief under Section 421. Since the tariffs have been in effect, U.S. domestic tire production has increased, tire producers have made new capital investments, and new jobs have been created for American tire workers.

"We applaud the Obama Administration for standing up and defending American jobs in its original decision to impose relief and in its strong defense of that action at the WTO. We look forward to continue working with the administration to take full advantage of all enforcement tools available to us so that the benefits of fair trade are made available to all Americans.

"Fair trade law enforcement should be the standard of our government in requiring China to fulfill its obligations under its accession agreement with the WTO more than a decade ago," he added.

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