Further US Reaction to ITC Ruling: Wait and See

While no one appeared to be surprised by the US International Trade Commission ruling yesterday on the USW’s petition to limit the importation of “Made in China” tyres, most took a wait and see attitude about the ruling.

The ITC voted 4-2 in favor of the union petition, saying that the growth in passenger tyre exports from China to the U.S. caused “disruption” in the US market. The ITC will send its specific ruling and suggested remedy on to the president by the end of this month, and the Obama Administration is slated to act by the end of September. “We anticipate that the final decisions on remedies will improve domestic job security, increase production and sales, and allow for investment in capital equipment to better compete in the global market for the long term,” said Tom Conway, USW International vice president.

Paul Fiore, TIA’s director of government relations, said, “We’re certainly not surprised, but we are disappointed nonetheless. And, of course, we are waiting to see what remedy is suggested by the ITC. “We’re still holding out hope that the administration will acknowledge the delicate nature of the relationship with China right now and not fall into a protectionist mode despite the issue here,” said Fiore, who hopes there is still “opportunities to do some lobbying here.”

“Of course we’re disappointed that the ITC voted in favor of the USW petition, but we will continue to cooperate and be part of the American Coalition for Free Trade in Tires,” said Josh Simpson, vice president of marketing for Hercules Tire & Rubber Co. The Coalition includes Hercules, as well as Dunlap & Kyle Co., Foreign Tire Sales, American Omni Trading Co., and Orteck Global Supply & Distribution Co. “We’re going to await the ITC’s recommendation to the president and we’re hopeful the president will make a rational decision,” Simpson said. “This could hurt the American consumer and our customers – the independent tyre dealers.”

Simpson said that Hercules is already considering alternative resources should the president take the USW’s position and slap a quota – back to 2005 levels – on the number of Chinese made tires that can enter the US. “Like all tyre importers we have created a strategy to mitigate risk to our customers and will continue to do so until we know what the final decision is,” he said. “Locating new manufacturers isn’t foreign to Hercules. It’s an ongoing part of our supply strategy. But, sure, it is the focus right now.”

“TIA believes that a reduction of this magnitude in the quantity of Chinese tyres imported would itself create a market disruption, and cause very real harm to our member companies and the US consumer,” the association said it its formal response to the ITC. “Our members, by directly importing or contracting with suppliers, are meeting the demands of a segment of the tire consumer market for lower-cost tyres. No manufacturing uptick would satisfy this product segment, but instead could create a need for product allocation, resulting in shortages and outages. In the best of times such occurrences are troubling, but in today’s climate could inflict severe financial harm on many retailers and on the motoring public.” (Tire Review/Akron)