Chinese Tire Tariff

In: Business and Management

Submitted By white450
Words 881
Pages 4
ECON 2010
11 November 2012

Chinese tire tariff lifted
September 2009 marked the beginning of a major tariff on imported Chinese tires created by President Obama in an effort to curtail imports considered to possibly be a detriment to U.S. workers. This motion was brought to the table by a complaint filed to the Federal Trade Commission by the United Steelworkers union citing unfair trade practices by China1. The belief was that cheap, imported Chinese tires were the root cause of the loss of over a thousand U.S. jobs in tire manufacturing. Many believe that the tariff was political posturing from Obama aimed at the ever critical Ohio automotive unions. Politics aside, the economic impact over the last 3 years has been great, or not so great, depending on which side of the fence you are standing. Import tariffs by design are used to help control trade balances with foreign countries in an effort to create a somewhat level playing field for all firms within an industry. The Chinese tire tariff has arguably been an irrelevant political attempt to bolster the support of union labor in Ohio.
Beginning as early as 2000 the United States had approximately 87,000 workers domestically in tire manufacturing with that number shrinking each year down to 55,000 in 20093. As with much of domestic manufacturing, tire companies began to look to foreign countries to produce their products due to lower costs and higher volume capabilities. With approximately 46.5 million imported units, 2008 marked the year of the highest level of Chinese tires in the U.S. market. Compared to the estimated 234 million tires sold in the U.S. in 2008, Chinese tires accounted for almost 20% of the aggregate total4. To put these figures in perspective, 1 out of every 5 tires sold in the United States was a Chinese tire. This is terrible for U.S. tire companies right? Not exactly, as U.S.…...

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