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U.S. Tariffs on Tire Imports from China

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by

Hugo d'EPENOUX

on 1 October 2014

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Transcript of U.S. Tariffs on Tire Imports from China

Bad Trade Enough is Enough
by the United Steelworkers Union
Groups who benefited and groups who suffered from the imposition of U.S. tariffs on Chinese tire imports
Exercise: 3 groups that were effected by the U.S. tariffs:
U.S. Tariffs on Tire Imports from China
Quick overview of the case
Nina Houston - Stephanie Weiler - Hugo d'Epenoux
October 1st, 2014 - GEB II (SPEX)
Professor Sosland

Thank You !
• In 2009 the Obama Administration imposed a 35% tariff on top of the 4% tariff already in place for Chinese imports of tires. These tariffs lasted for 3 years (until 2012) and decreased by 5% each year.




• This tariff was imposed after the United Steelworkers Union filed a petition with the International Trade Comission.
What is your reaction?
Effect on different tire export countries



- China: tire exports , other countries: tire exports
- 30% reduction in Chinese tire imports (2009: 22m, 2011: 15.5m)
- Mexico, Thailand, Indonesia: increase of tire imports of more than 100% (2009: 2m, 2011: 5m)


- reasons:
price
difference in quality
U.S.
CHINA
Others foreign exporters of tires
--> What do you think the effects of the tariffs were on your particular group?

--> How do you think you would have reacted in response to the tariffs?
Winners
:

- Domestic producers without subsidiaries in China

- Foreigners producers

- The U.S.
Steelworkers
- Not entirely black and white.

- Strained trade relations with China

- Employment did not actually increase until 2011, decreasing again in 2012.

- Costly protectionism policy (
$900,000 per job saved
)

- Consumers lost out

Was this trade policy in the best interest of the U.S?
Key Issues of Concern That Have Influenced the US Tire Industry
Annual Change Looking Specifically at Exports and Imports
What is currently happening without any extra tariffs in place on Chinese tire imports?
- US tire industry projections positive (+1.2% in 2015)
- Domestic production capacity is set to increase in the “wake of a revival in the automotive sector”
- New factories have been built- Michelin and Bridgestone have both built new factories in the U.S in 2013.
- Goodyear plans on building a $500 M new tire plant in the US within 2014-2016

Where The USW Stands Now
June 2014 The United Steelworkers filed another tire antidumping and countervailing duty case against China with the ITC.

What does this say about tariff policies in general?
- Retaliation-trade wars

- Creating jobs in the American manufacturing sector and ensuring that China plays fair on the international market-good policy goals
--> trade protectionism is a costly way of going about these tasks.

- Creates inefficiencies in markets

- Consumer dissatisfaction

Losers
:

- U.S. Consumers (& the retail industry)

- Tire Producers in China and the Chinese steelworkers

- U.S. Tire dealers

- U.S. Exports of chicken parts industry
Full transcript