The Wall Street Journal reports, “The US took a step Monday toward imposing tariffs on Chinese-made tyres in response to efforts by workers in the American tyre industry to prevent jobs from moving to China. The US Commerce Department issued a preliminary finding that typical Chinese-made tyres for passenger cars and light trucks were unfairly subsidized and should be subject to punitive tariffs ranging from 17.7 percent to 81.3 percent, depending on the manufacturer.
A Chinese unit of US-based Cooper Tire & Rubber Co., Cooper Kunshan Tire Co. Ltd., would face a 12.5 percent duty on tyre shipments into the US if the preliminary decision is confirmed next year. The United Steelworkers, which represents about 28,000 tyre workers, initiated the trade case. The labor union says Chinese tyres imports last year unfairly benefited from government subsidies and were dumped, or sold below fair value, on the US market. “We are commending the preliminary findings of the Commerce Department,” said Roy Houseman, who lobbies Congress on behalf of the United Steelworkers.
The tyre-making ranks within his union have shrunk between 2011 and 2014 as Chinese shipments have grown, Houseman said. US imports of tyres covered in the case climbed to $2.1 billion last year, from $968 million in 2011, the Commerce Department said. Meanwhile, tyre prices in the US have dropped by 3 percent this year, according to auto club AAA. A spokesman for the Chinese Embassy in Washington did not immediately respond to a request for comment on the case.
A spokeswoman for Cooper Tire did not immediately reply to a request for comment. Last month, Goodyear Tire & Rubber Co. reported a 4 percent drop in the number of tyres it sold in North America in the third quarter. The company said dealers were filling their warehouses with Chinese-made tyres in anticipation of US trade action. In addition to the subsidies ruling, the Commerce Department is set to announce preliminary findings on a related antidumping case for tyres in January. If US 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 US imposed punitive tariffs on Chinese tyres that have since expired.