U.S. Moves to Impose Tariffs on Chinese Tires

Commerce Department Says Tires Are Unfairly Subsidized

By 

WILLIAM MAULDIN

Updated Nov. 24, 2014

The U.S. took a step Monday toward imposing tariffs on Chinese-made tires in response to efforts by workers in the American tire industry to prevent jobs from moving to China.

The U.S. Commerce Department issued a preliminary finding that typical Chinese-made tires for passenger cars and light trucks were unfairly subsidized and should be subject to punitive tariffs ranging from 17.7% to 81.3%, depending on the manufacturer.

A Chinese unit of U.S.-based Cooper Tire & Rubber Co. , 

Cooper Kunshan Tire Co. Ltd., would face a 12.5% duty on tire shipments into the U.S. if the preliminary decision is confirmed next year.

The United Steelworkers, which represents about 28,000 tire workers, initiated the trade case. The labor union says Chinese tires imports last year unfairly benefited from government subsidies and were dumped, or sold below fair value, on the U.S. market.

“We are commending the preliminary findings of the Commerce Department,” said Roy Houseman, who lobbies Congress on behalf of the United Steelworkers.

The tire-making ranks within his union have shrunk between 2011 and 2014 as Chinese shipments have grown, Mr. Houseman said. U.S. imports of tires covered in the case climbed to $2.1 billion last year, from $968 million in 2011, the Commerce Department said. Meanwhile, tire prices in the U.S. have dropped by 3% this year, according to auto club AAA.

A spokesman for the Chinese Embassy in Washington didn’t immediately respond to a request for comment on the case. A spokeswoman for Cooper Tire didn’t immediately reply to a request for comment.

Last month, Goodyear Tire & Rubber Co. reported a 4% drop in the number of tires it sold in North America in the third quarter. The company said dealers were filling their warehouses with Chinese-made tires in anticipation of U.S. trade action.

In addition to the subsidies ruling, the Commerce Department is set to announce preliminary findings on a related antidumping case for tires in January. If U.S. agencies confirm the tariffs, a process that could take six months, Beijing could challenge the duties through the World Trade Organization.

Five years ago, following on a United Steelworkers complaint, the U.S. imposed punitive tariffs on Chinese tires that have since expired.