Donald Trump appears to be making good on his promise to impose tariffs on products imported into the USA, having said he will impose tariffs of an extra 10 per cent on Chinese goods as well as tariffs of 25 per cent on all imports from Canada and Mexico.
We have already reported how Donald Trump’s second term as US president is likely to result in wide-ranging import tariffs. The kind of 20 per cent general import tariffs and 60 per cent China-specific import tariffs are significant enough, but market analysts are highlighting the secondary impact of tariffs on shipping costs.
The scale of Donald Trump’s success in the recent US election surprised many and disappointed those looking for a return to the White House for the democrats. But whatever you think of the once-again President Elect, based on his many and varied promises to the electorate, there is no doubt that his second term will result in change. The question is how will that change affect tyre businesses?
On 23 November, Oxford Dictionaries declared that “unprecedented” is the word of year. Normally the world famous English language experts choose just one word to sum up the preceding 12 months, but such was the cumulative uniqueness of the series of events that has characterised 2020, this year they chose several “words of an unprecedented year” – a move that is itself unprecedented. So why not use their zeitgeist-capturing collection of novel verbiage as a way of reviewing 2020 from a tyre business perspective?
With the 2020 US election shaping up to be the closest in the last two decades, no-one can yet say who will be the winning. However, share price analysts that are literally experts at hedging their bets, have compiled a list of post-Election share picks. In short, while growth is expected across the board in 2021, the recently-berated Goodyear is not the only tyre brand that would stand to gain from the end of Trump presidency.
In April 2019 the US Department of Defense awarded Goodyear a $38 million contract via its Defense Logisitics Agency. This three-year deal for the delivery of aircraft tyres is the most recent in a long supply relationship between the US tyre maker and the country’s military. This relationship continues, despite President Trump’s call for a boycott of Goodyear.
No nasty trick is off-limits in the run-up to the US presidential election. With his call to boycott Goodyear, President Trump has disavowed and repudiated the corporate culture nurtured by the tyre maker over decades. A culture distilled into a concise slogan, ‘Protect Our Good Name’. Non-subscribers can read the full text of this article here.
In order to prevent damage from ‘friendly fire’, Titan International Inc. has issued a statement distancing itself from the spat between US President Donald Trump and the Goodyear Tire & Rubber Company. Titan wants to make it clear that there is absolutely no link between it and the alleged Goodyear diversity training document that’s circulating on the internet.
This publication stands by a long-standing precedent of being a-political. Rather like the saying that it is bad manners to talk religion or politics while dining, we have historically opted not to take a line on such issues. Propriety aside, there is another particular good reason for this approach. During the nearly eight decades since Tyres & Accessories was published in 1946, 16 prime ministers and many more governments have come and gone, but one thing has remained: the motoring public’s demand for tyres has continued and even grown in the medium and long-term. But this column isn’t finishing school, so why the discussion on protocol? We don’t normally engage in politics, but this month politics engaged with the tyre business more directly than ever before when US President Donald Trump told US motorists: “Don’t buy GOODYEAR TIRES”, adding: “Get better tires [sic] for far less!” (see pages “President Trump attacks Goodyear” for further details of the furore).
It is an open secret that the US presidential limo, affectionately known as “the beast” runs on Goodyear tyres. What many people are less aware of is that – owing to the fact that “the beast” has significant amounts of armour plating – unlike most limousines, the US presidential limo is actually fitted with 19.5-inch truck tyres that are better suited to the vehicle’s increased load. Whatever the fitment, 24 hours after Donald Trump tweeted “Don’t buy GOODYEAR TIRES”, adding: “Get better tires for far less!”, one has to ask if the current incumbent of the White House will be taking his own advice.
Goodyear has been forced to release an official response after US President Donald Trump urged motorists not to buy its tyres in a social media message. On 19 August, the President rebuked Goodyear in an apparent critique of its “One Team” equality policies, saying: “Don’t buy GOODYEAR TIRES – They announced a BAN ON MAGA HATS”. He further suggests that motorists could “Get better tires for far less!” – pointedly undermining the company’s premium brand positioning and performance without reference to any tyre performance or price data.
At the time of going to press, the President of the United States of America is mid-way through a state visit to the UK. Before he even landed on British soil, President Donald Trump stirred up controversy by tweeting his disparaging thoughts about London Mayor Sadiq Kahn. Whatever view one might hold about the propriety of Trump’s visit, we all know that 31-gun salutes and tea with the queen are about more than niceties. Sure enough less than 24 hours into the state visit, presidential talk turned to trade, with Trump backing out-going Prime Minister Theresa May to complete Brexit negotiations and promising a “phenomenal” trade deal between the US and UK. But all this is set against the backdrop of all-out trade war between the US and China at the same time that Europe is involved in somewhat more Cold War-esque trade skirmishes with China as well. The questions are: do such measures work? And what do they mean for the tyre business?
The Specialty Equipment Market Association (SEMA) has voiced its disapproval of US President Trump’s aim to impose 25 per cent tariffs on a range of products imported from China; the US-based association, which represents the vehicle aftermarket, says it opposes these tariffs as well as the Trump administration’s tariffs on steel and aluminium and the threatened tariffs on imported cars and automotive parts – it considers them “as misplaced and having the potential to impose significant harm on US businesses and consumers.”
The tyre industry has seen its fair share of import tariffs in recent years. The largest scale of these, across the widest range of products, was initiated by the US against Chinese produced car tyres in 2009. That president has been and gone since then (as have further tariffs on car tyres and OTR tyres), but still tariffs are making a huge impact on the tyre industry in the USA and beyond.
US president Donald Trump has announced plans to impose 25 per cent tariffs on US$50 billion worth of Chinese goods, according to various leading news sources. The tariffs affecting over 800 products including aircraft tyres and are due to come into effect on 6 July. The White House said it would consult on tariffs on the other $16 billion of products with a view to applying these later.
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