The Alliance for American Manufacturing (AAM) has issued a report, saying
that the tariffs, imposed one year ago by President Barack Obama, on
imported tires from China are achieving a positive effect on U.S. tire
manufacturers and their workforces.
"The relief provided by President Obama is fulfilling a promise that
permitted China's entry into the World Trade Organization – and that promise
was American workers and companies would not be harmed by non-market economy
distortions in China," says USW International President Leo W. Gerard.
"With relief in place, American workers are beginning to see jobs return to
their communities. We must maintain that momentum and allow the tariffs to
stay in effect for the full three years," Gerard urges. "To do otherwise
would be to break the repeated promise to American workers and companies that
they would not be unfairly harmed."
The USW in 2009 sought an investigation into an unprecedented surge of
Chinese tires under Section 421 of the Trade Act of 1974, which was designed
to give the domestic industry and its workers breathing room from surging
imports, he says.
"Section 421 of the trade law is doing what it is intended to do," Gerard
adds. "As AAM's report clearly defines, it has reversed a massive decline in
domestic production and provided much needed relief to workers, their
employers and communities from a flood of Chinese tires."
PAGE 2The Trade Act provision was an important commitment made by the Chinese to
permit its entry into the World Trade Organization (WTO). It was designed to
facilitate the mutually beneficial growth in trade by reducing the adverse
effects of distortions inherent in China's non-market economy, according to
Gerard.
"Widely recognized market distortions in the state-controlled Chinese economy
include exchange rate management, massive government subsidies and help from
state banks. In addition, China's industrial policies and practices regarding
export requirements for investors, technology transfers and non-tariff
barriers to trade are inconsistent with WTO rules," he says.
"When the International Trade Commission (ITC) examined the surge in tire
imports from China, it discovered material injury to the domestic industry
through continuous declines in U.S. producers' domestic capacity, production,
shipments and employment from 2004 to 2008, a period of general economic
growth," Gerard notes.
Domestic capacity declined from 226.8 million tires to 186.4 million tires
during the four-year period while actual production dropped from 218.4
million tires to 160.3 million tires, he says. As capacity utilization fell
from 96.3 percent to 86 percent, the number of production workers
substantially declined as did their hours worked and wages.
"There is no doubt that the relief authorized by the President has reversed
the massive decline in domestic production," says USW International Vice
President Tom Conway, who heads labor negotiations with Goodyear.
