CITAC Urges Administration to Tread Lightly on Penalties for Tires from China

WASHINGTON--The Consuming Industries Trade Action Coalition (CITAC) today expressed concern about the impact on U.S. downstream manufacturers from the U.S. International Trade Commission’s (ITC) proposed tariffs on tire imports from China. CITAC encouraged the Obama Administration to consider the impact on U.S. manufacturers and other downstream industries when deciding whether to accept the ITC’s recommendation.

The ITC recommended today that tariffs be imposed on tires from China of 55 percent in the first year, 45 percent in the second year, and 35 percent in the third year. The tires at issue are pneumatic rubber tires manufactured in China meant for use on lightweight vans, trucks, sport utility vehicles, and other lightweight classifications of motor vehicles.

"In deciding whether to follow the ITC's recommendation, President Obama needs to consider the potentially devastating impact of punitive tariffs on U.S. automakers who are already facing the worst economic situation in the industry's history," said Lewis Leibowitz, CITAC Counsel and Partner at Hogan & Hartson, LLP.

"Not only will imposing penalties drive more auto-related manufacturing jobs overseas and threaten to undo much of the Administration's hard work to revive the auto industry, it will also invite a wave of similar 421 petitions to be filed in the future, placing U.S. downstream industries at a significant disadvantage compared to firms overseas who make competing finished products," said Eugene Patrone, Executive Director of CITAC.

The ITC's recommendation comes in response to a petition put forth by the United Steelworkers of America under Section 421 of U.S. trade law, the China Safeguard Investigations provision. Under Section 421, petitioners may request the government to determine whether imports of a product from China are being imported into the United States 'in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products.' While the ITC makes a recommendation on remedies, the final decision rests with the President.