15.6% to 17.6% tariffs are effective immediately -- and retroactive
The United States Department of Commerce (DOC) has set additional tariffs on Chinese consumer tire imports. Based on the decision -- which goes into effect immediately but can be reviewed at a later date -- Cooper Tire & Rubber Co. is better off than Shandong Yongsheng Rubber Group Ltd.
Tire importers that stockpiled Chinese product in advance of the tariff were also hit hard by the decision: The tariffs are retroactive to the last 90 days.
The DOC reportedly imposed the following tariffs (in addition to the existing 4% tariffs) on consumer tires imported from China:
Cooper Tire: 12.5%
All other Chinese exporters: 15.69%
This is the first round of tariffs, which were handed out because the DOC determined the Chinese government was illegally subsidizing tires exported to the United States. More tariffs are possible; the deadline for the DOC to rule on the Chinese antidumping duty determination -- a separate issue -- is Jan. 20, 2015.
Unless it is struck down, the tariff will last for at least five years; based on similar cases involving Chinese imports, 10 years may be more likely.
Trailer and race tires are exempted.
"The USW is gratified the Commerce Dept. found significant countervailing duty margins on subsidized Chinese tire imports," says Leo Gerard, president of the United Steelworkers (USW) union.
"The Commerce Dept. is right to neutralize the negative effects of the unfair subsidies the Chinese government has granted to tire exporters. These illegal subsidies have resulted in thousands of lost American tire manufacturing jobs. If left unchecked, they would devastate tens-of-thousands more jobs in the U.S. economy."
In July 2014, the DOC's International Trade Commission (ITC) determined that passenger and light truck tire imports from China may or may soon be "materially" injuring the domestic tire industry. The ITC's preliminary findings followed an initial determination by the DOC to investigate dumping claims by both the United Steelworkers (USW) and AFL-CIO.
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