USW Files Trade Case Against Chinese Imports

According to statistics published by the United Steelworkers, between 2004 and 2008 the volume of tyres imported from China increased 215 per cent, and the value of these imports by 295 per cent. During this same period US tyre production declined by more than a quarter and the domestic industry’s share of the US tyre market dropped from 63 per cent to less than half. These figures represent conditions in a relatively robust period for the industry – since the second half of 2008 the market has shrivelled considerably, and US based tyre producers are feeling the pinch more than ever. For this reason the USW has filed a major trade case against, in its own words, “the flood of imported consumer tyres from China that have led to thousands of job losses and a growing number of plant closings throughout the US.”

Upon announcing the filing of the case on April 20, USW International president Leo W. Gerard declared “American workers are struggling to make it through the worst economic crisis in 80 years. Our tyre industry is collapsing under the weight of 46 million Chinese tyres entering our shrinking market annually.” He added that the USW is “aggressively using America’s trade remedy laws to help workers and their employers combat an import surge from a country not playing by the rules.”

The particular part of the US trade law referred to be Gerard – Section 421 – was passed by the US Congress in 2000 to enable companies, groups of workers and other parties to seek relief when rapid increases in imports of certain products, cause or threaten “market disruption” to a domestic industry. The USW International presidents sees it as “a tool to redress Chinese import surges that gets us through the current economic crisis and preserves a part of America’s industrial base.”

The petition filed by the USW on behalf of its members employed in the US tyre industry requests the imposition of an import quota on Chinese tyres to stem the influx of these products – said to now stand at 21 million consumers tyres per annum. The quota, says the USW, would return the quantity of tyres imported from China back to 2005 levels. This level would then be permitted to increase five per cent a year over a three-year period. The petition states such an action would improve domestic job security, enable US tyre manufacturers to regain lost market share, increase production and sales, and allow investment in capital equipment to better compete in the long term.

The petition has been filed with the US International Trade Commission, an independent agency, who now has 60 days to investigate and decide whether to recommend the provision of import relief. Should the Commission rule in favour of the USW, President Barack Obama would have 90 additional to decide what, if any, protection to provide.