Tire Industry: No Common Tariff Thread
AKRON, OHIO (
) -- The tire industry has not found its groove on the tariff issue.
Although it generally enjoys a cooperative relationship with the industry's principal union, the United Steelworkers, tire makers and retailers have not taken a unified position on President Obama's decision to impose a tariff as high as 35% on passenger and light truck tires imported from China.
China retaliated Sunday, moving to impose tariffs on American exports of automotive products and chicken meat and raising the possibility of a trade war.
The USW represents about 15,000 tire workers, accounting for about half of U.S. tire production. It filed the trade complaint that led to Obama's decision. The union "has a nice relationship with each of the domestic tire companies," said USW spokesman Gary Hubbard, who noted that the companies completed questionnaires in connection with the filing. But "they're very intimidated by China," he said.
The Rubber Manufacturers Association, which represents major manufacturers like
Goodyear
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and
Cooper
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, has not taken a position.
"Our members directed that we not become involved," said spokesman Dan Zielinski. "They said they would handle this individually as companies. Trade issues affect each company differently."
Akron-based Goodyear said the tariff decision has too many variables to enable for a full understanding of the potential impact.
Among the potential reactions, "tire makers can shift their current Chinese-based production to other countries to bypass any potential tariffs to serve the U.S.," Goodyear said, in a prepared statement. Additionally, "the excess capacity from China that would become available because of tariffs is likely to flow to other regions."
The company said that less than 2% of the tires it sells in North America come from China and that it "primarily sells its tires in the regions and markets where they are manufactured."
Meanwhile, the Tire Industry Association, which represents retailers, said it is "deeply disappointed" with the "punitive tariff. The tariff will price these tires out of the reach of many consumers, and will lead to a tightening in the remaining supply of lower-cost tires," the TIA said. Additionally, it warned, the move could lead to at least 25,000 job losses.
The tariff may have various consequences, but China needs to follow trade regulations it accepted in order to gain entrance into the World Trade Organization, and the U.S. needs to enforce sanctions when regulations are not followed, Hubbard said. "It doesn't make any sense to negotiate rules on behalf of our country it we don't enforce those rules," he said. "They become meaningless."
Hubbard said delegates to the AFL-CIO convention in Pittsburgh are eagerly awaiting Obama's appearance on Wednesday. "Oh boy, he'll be very enthusiastically greeted," he said.
-- Written by Ted Reed in Charlotte, N.C.
