Will domestic tiremakers back a Chinese tire quota?

Bob Ulrich
Posted on April 23, 2009

The United Steelworkers believe that Chinese imports are out of countrol. That is why the USW (which technically stands for the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union) filed a petition with the United States International Trade Commission asking for relief.

Specifically, the union wants an "import quota" of 21 million Chinese-made consumer tires (there were more than 46 million imported into the country in 2008, according to the 2009 Modern Tire Dealer Facts Issue). The quota would increase 5% annually.

Chinese passenger and light truck tire imports increased 221% in the last five years. The union classifies this dramatic growth as a "market disruption" under Section 421 of U.S. trade law, which is designed to give injured parties -- in this case, union workers -- relief when the domestic market suffers as a result.

To date, I have been unable to get any of the U.S.-based tire manufacturers or tire industry organizations to voice either their support of it or opposition to it. They are all reviewing it.

Here are my thoughts. The domestic tire makers have spent a lot of money building manufacturing plants in China. A lot of those 46 million tires are imported by them. They also, as the USW points out, have been closing domestic plants at an accelerated rate.

There may be overcapacity right now, but when the dam of demand breaks, where will the tires come from? And as the number of people in the U.S. increases, the demand will increase accordingly.

Will limiting Chinese imports truly keep the domestic plants running full tilt and union workers from losing their jobs? I don't think so. There are too many other options. It's a global economy, and there are plenty of low-cost facilities in Mexico and South America and Thailand and Vietnam and India and... well, you get the picture.

If manufacturers believe they can profitably make tires in the U.S., they will. That makes the upcoming negotiations between the USW and tire manufacturers such as Bridgestone Americas Inc., Goodyear Tire & Rubber Co. and Michelin North America Inc. so crucial to the success of the union's petition.

If the domestic tiremakers get enough concessions, they may back the petition. If they don't, they won't.

Related Topics: Chinese imports, Negotiations, USW

Bob Ulrich Editor
Comments ( 1 )
  • Tire

     | about 11 years ago

    We should back a quota......that is if we intend to make anything at all in this country. Of course, Wall Street would have to eat crow first.

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