Tariffs for Chinese Tires

file4901240590828You might have noticed, but there is a chance that your car tires were manufactured in China. Perhaps you may not even care, but the tire industry does. In 2013, US imports of tires earned $2.1 Billion, up from $968 million in 2011. Freight forwarders were certainly busy in 2013 with Chinese tire imports, as those tire companies received good ocean freight shipping quotes. Meanwhile, US-made tire prices declined by 3% this year.

Seeing this decline and fearing that US tire manufacturing jobs could go to China, United Steelworkers, the union for many tire workers, decided to fight back. United Steelworkers presented a case to the US Government stating that Chinese tires benefited greatly from subsides and the Chinese tires are sold below the fair market price. United Steelworkers wanted fair competition.

It seems that the US Commerce Department agrees with the findings from United Steelworkers on the subsidy issue. The US Commerce Department now plans to raise the tariffs on Chinese tire imports. The tariff increase depends on the manufacturer, and it could be anywhere from 17.7%-81.3%. If the tariff plan passes, it could take six months to implement. After that, China might complain to the World Trade Organization about the tariff increase.

Assume the tariff increase occurs and China fails to block it: How would that impact the shipping carriers who transport the tires from the Far East? How would this also impact consumers in the US who are purchasing tires for their vehicles? It seems that we will have to wait and see what happens.

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