Chinese tire industry begins to mobilize against possible US trade protectionist policies

In response to news that the US is investigating the possibility of placing tariffs on tires imported from China, the China Rubber Industry Association has begun mobilizing material suppliers and product manufacturers in the Chinese tire industry. In a CNRreport appearing today, the CRIA stated that, if the US imposes a tariff on Chinese tire imports, it will strongly urge the Chinese government to take the appropriate actions.

The United Steelworkers begun petitioning the US International Trade Commission and Department of Commerce to begin looking into implementing so-called anti-dumping measures on imports of sedan and light truck tires from China. If the US government decides to implement the taxes, it will be the largest protectionist policy the Chinese tire industry has had to deal with. The proposed policies will places tariffs of 60.15 percent and 25.73 percent on Chinese tires, making it impossible for Chinese tires exports to the US to be competitive. Such a policy could potentially affect the jobs of nearly one million Chinese workers.

There has already been negative influences felt across the Chinese tire industry. Hangzhou Zhongce Rubber Company CEO Shen Jinrong stated that many American consumers, afraid of having to deal with the high taxes, have already begun halting orders.

However, the Chinese tire industry is not willing to stand idly and wait. Mr. Shen remarked: "The CRIA has already organized several discussions. Chinese tire enterprises are unanimous in their opinions and actions, and they all believe that this sort of policy is a gross example of protectionism. We will negotiate with the relevent American departments, as well as use evidence to demonstrate that these policies are not logical."

The US previously raised a tariff on Chinese tires in September 2009, which lasted three years. During that time Chinese tire exports to the US fell over 60 percent.

Mei Xinyu, researcher at the Chinese Academy of International Trade and Economic Cooperation, pointed out that the policies would bring no advantages to the US: "The US tire industry would add only 1,200 new jobs [if the policies were implemented]. Meanwhile, US consumers would have to pay an extra $1.1 billion and the sales industry would lose over 3,700 new jobs."

Mr. Mei added that there is a high chance that the policies will not go through. Earlier this month the World Trade Organization already decided that 26 of the so-called 'anti-dumping' and 'anti-subsidy' policies that the US enforces on Chinese products go against international rules. Mr. Mei remarked: "In the background of these events, the US cannot possibly think of reviving earlier policies, as we are much more active than before."