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Tire Tariff * USA - Another trade war?
The big concern about the institution of any tariff is whether or not it winds up the first shot fired in a trade war between two nations
Washington,DC,USA -Fleet Owner, by David Cullen -Sep 18, 2009: -- There may well be more to the tariff being placed on tires made in the People’s Republic of China this month than the impact it will have on the purchase price of such tires for owners of passenger cars and light trucks. Once such a diplomatic dispute is under way, escalation can set in rapidly and soon other industries are impacted... The tariff takes effect on September 26 and will affect primarily tires sold at the lowest price points for cars, SUVs, pickups and vans. The tariff is multi-year, imposing a 35% duty in the first year, 30% in the second, and 25% in the third. But under the 421 Safeguard provisions of the World Trade Organization, President Obama can revisit the decision after six months and then modify, remove or leave in place the tariff decision... Not surprisingly, the Chinese government adamantly opposes the U.S. action as unwarranted protectionism... According to the United Steelworkers (USW), which pushed for the tariff: “When China joined the WTO in 2001, it agreed that other WTO members, including the U.S., would have the right for 12 years to impose safeguard relief on goods from China when imports of those goods increased rapidly and caused injury to domestic industries. .. [and] China does not have the right to retaliate against actions that are WTO-consistent” ... Aaron Murphy, vp of China Manufacturers Alliance (CMA), which markets Chinese-made Double Coin commercial truck tires here, told FleetOwner that “there’s a lot of politics driving this. There are [421 Safeguard] provisions that allow the U.S. to review the action in six months. This was definitely a political [move] vs. coming out of an economic issue… and so it will take the governments talking to each other” to resolve it... (Photo from static.howstuffworks: stock car tire wars)
Labels: tires news
posted by Unknown @ 10:23 AM
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