ITC Must Act to Stop China’s Predatory Tire Trade Practices

By Sens. Sherrod Brown (D-Ohio), Jeff Sessions (R-Ala.), Charles E. Schumer (D-N.Y.), and Rob Portman (R-Ohio)

Once again producers and workers making passenger vehicle and light truck tires in America are in danger.  China has targeted the market with millions of dumped and subsidized tire imports that are killing jobs and reducing wages.  They undermine the principles of free trade and free enterprise by ignoring the rules that they promised to uphold.  It’s time for our government to say: enough is enough. 

Recently we asked the U.S. International Trade Commission (ITC) to recognize the injury that the industry and its workers have experienced, along with the injury inflicted on the communities where they work and live.  Shortly thereafter, the U.S. Department of Commerce reaffirmed its view that Chinese tire makers have been dumping and subsidizing sales into our market, with rates ranging from 30 to 169 percent.  Commerce, after a careful investigation of the facts, actually increased the preliminary amount of subsidies and dumping that they had calculated shortly after the cases were filed.  Still, China has decided to build up the size and scope of its industry and ship its unfairly-priced tires here to keep its companies producing and workers employed. 

Why does this matter?  Fair rules of trade, properly enforced, benefit everyone.  The rules were carefully negotiated to ensure that companies and workers who make competitive products, at fair prices and of high quality, should be able to sell their products across the globe. China, in this industry and others, has decided to circumvent the rules in order to increase production and employment through an export-led growth model.  

While prices in the short-term here might be lower to our consumers, the ability of companies to invest in new plants and equipment is limited, and workers often experience stagnating or declining wages, if not job loss.  As a result, offshore producers take away market share from U.S. producers, gradually claiming more and more of the market. In the long-term we may lose another industry due to predatory trade practices. 

This is exactly what’s happening today in the U.S. tire industry.  As America faced its financial crisis in 2008 China flooded the domestic market with tires.  The ITC approved a petition calling for relief, based on a provision China agreed to when it joined the World Trade Organization. For three years, U.S. producers were able to help rebuild the sector.  But, as soon as the provision expired, China began to once again, flood the U.S. market.

The result has been lost sales, production levels reduced below what they should have been in a growing market, as well as suppressed hours, and wages.  All of the growth in the U.S. market was unfairly taken by China’s producers. 

The facts are clear.  What’s in question is how our government will respond to China.  China argues that U.S. companies and workers are doing just fine.  That’s like arguing that a worker doesn’t feel the pain when hours are reduced and pay is cut.  Under fair trade conditions, the U.S. industry would be doing much better and workers would be sharing in the benefits.  China shouldn’t be allowed to skirt the rules while arguing that it’s not doing enough damage to our people to justify relief.    

In the coming weeks, the ITC will have the opportunity to determine if the U.S. tire industry has been injured, which will decide if a duty is placed on China.  China’s producers are clearly pursuing predatory trade practices and these practices are causing damage to the U.S. industry. The ITC should carefully consider the strong evidence of this damage and put a stop to it.  It is time to restore a level playing field.

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Brown is Ohio’s senior senator, serving since 2007. He sits on the Agriculture, Nutrition and Forestry; the Banking, Housing and Urban Affairs; the Finance; and the Veterans’ Affairs committees. Sessions is Alabama’s junior senator, serving since 1997. He sits on the Armed Services; the Budget; the Environment and Public Works; and the Judiciary committees. Schumer is New York’s senior senator, serving since 1999. He sits on the Banking, Housing and Urban Affairs; the Finance; the Judiciary; and the Rules and Administration committees. Portman is Ohio’s junior senator, serving since 2011. He sits on the Budget; the Energy and Natural Resources; the Finance; and the Homeland Security and Governmental Affairs committees.

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This has been reposted from The Hill.

Posted In: Allied Approaches

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