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AutoBlog: Obama administration slaps hefty import tariffs on Chinese-made tires

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Filed under: China, Government/Legal

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The aggrieved parties are: the United Steelworkers and the U.S. government on one side, Chinese tire companies and the Chinese government on the other. The issues are, as always, jobs and money. The Steelworkers brought a case against Chinese tire companies for dumping tires on the U.S. market over the past few years and in the process putting more than 5,000 people out of work and closing seven domestic tire factories. The case was ruled on by the U.S. International Trade Commission, which found in favor of the Steelworkers. In response, the current administration plastered a 35% tax on Chinese passenger car and light truck tires.

Naturally, the Chinese are miffed, to say the least. They feel the tariff is contrary to World Trade Organization rules and President Obama's rhetoric on current tariff levels, as well as being a tactic of undue protectionism. When China entered the WTO, the U.S. specifically negotiated the right to protect itself against a sudden wave of Chinese goods, and the ITC feels that China's share of the tire market having grown 14% in four years, with 31 million more tires entering, is just such an occasion.

Politics could be the decider in this one, however. China can complain to the WTO, attempt to impose its own countermeasures, or at the upcoming G-20 meeting it can simply whisper in Obama's ear, "You know that $1.56-trillion-and-counting deficit you guys need floated..." Nobody wins in the case of escalation, but we have a feeling the fight isn't yet finished.

[source: Wall Street Journal | Photo: Mark Ralston/AFP/Getty Images]

Obama administration slaps hefty import tariffs on Chinese-made tires originally appeared on Autoblog on Mon, 14 Sep 2009 13:58:00 EST. Please see our terms for use of feeds.

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Naturally, the Chinese are miffed, to say the least. They feel the tariff is contrary to World Trade Organization rules and President Obama's rhetoric on current tariff levels, as well as being a tactic of undue protectionism.

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What do the United Steelworkers have to do with tires? Wouldn't that be a UAW thing>

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What great news. I'm so glad the government gets to punish me for wanting to buy cheaper tires.

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What brands of tires sold in the US are Chinese? Some cheap off-brands?

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What great news. I'm so glad the government gets to punish me for wanting to buy cheaper tires.

Good. Times like these pretty much demand helping each other out; greed got in the way and led us to this mess, so a little self-sacrifice will get us out of it.

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What do the United Steelworkers have to do with tires? Wouldn't that be a UAW thing>

What do the United Auto Workers have to do with the Teaching Assistants in the University of California System?

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What do the United Steelworkers have to do with tires? Wouldn't that be a UAW thing>

Steel which is used in reinforcement of tires has to be produced in Steel plants. Hence USW getting in saying that the cheap steel is produced in China along with the tires.

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What great news. I'm so glad the government gets to punish me for wanting to buy cheaper tires.

Did you read how many jobs were lost in this country? How much do those "cheaper" tires really cost?

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Why should I be forced to "sacrifice" so inferior American tire workers can keep their unproductive jobs? They clearly aren't as good as their Chinese competitors, simple as that. They lose their job and the labor market continues to churn.

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Why should I be forced to "sacrifice" so inferior American tire workers can keep their unproductive jobs? They clearly aren't as good as their Chinese competitors, simple as that. They lose their job and the labor market continues to churn.

Who says they aren't 'as good' as the Chinese? Because they won't work for slave wages and excessive hours like workers in China do? You probably support Wal-Mart and their infinite supply of cheap products made by cheap Chinese labor.

Edited by Cubical-aka-Moltar
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Who says they aren't 'as good' as the Chinese? Because they won't work for slave wages and excessive hours like workers in China do? You probably support Wal-Mart and their infinite supply of cheap products made by cheap Chinese labor.

Ummm... dude, yes.

I shop at Walmart. (and only feel the slightest guilt about it).

Set up a capitalist society and what else do you expect people to do?

To quote the eloquent Method Man, "Cash Rules Everything Around Me". :neenerneener:

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Why should I be forced to "sacrifice" so inferior American tire workers can keep their unproductive jobs? They clearly aren't as good as their Chinese competitors, simple as that. They lose their job and the labor market continues to churn.

remind me again what cheap tires are OEM for the ZR1...

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Why should I be forced to "sacrifice" so inferior American tire workers can keep their unproductive jobs? They clearly aren't as good as their Chinese competitors, simple as that. They lose their job and the labor market continues to churn.

Chinese tires, at this point, are of sub-par quality. The Chinese tires are cheaper because they use cheap labor and cheap materials. In many cases, paying more up front results in a better overall deal. Which is a better deal: A chinese made tire that lasts barely 25k miles, gives poor traction, and frequently needs to be rebalanced, or a US/Canada/EU made tire that lasts 60k miles, gives good traction and rides well yet is double the cost.

If you don't believe me about the average quality of chinese made tires, just go browse the reviews over at TireRack and Epinoins.

But so many of us in America are only concerned with the "now" and the "me".

I'm not even suggesting that we only buy US made tires, hell I just bought a set of Michelins, .... but in this case, the Chinese are clearly dumping.

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Wow, I can't believe anyone here would want cheap tires. Shocking, considering that the thousands of dollars electronic gadgetry designed to make drivers impervious to bad weather can easily be defeated by an inferior set of tires.

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Wow, I can't believe anyone here would want cheap tires. Shocking, considering that the thousands of dollars electronic gadgetry designed to make drivers impervious to bad weather can easily be defeated by an inferior set of tires.

Amen to that!

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Why should I be forced to "sacrifice" so inferior American tire workers can keep their unproductive jobs? They clearly aren't as good as their Chinese competitors, simple as that. They lose their job and the labor market continues to churn.

Well the article says the Chinese are "dumping" the tires here, which would mean they are selling them at a price cheaper than it cost to make them, which is against the WTO rules. The sole reason they would do that is to close local competition, so they can take a bigger share, and raise prices later. That wouldn't help the consumer either.

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It never ceases to amaze me that people don't understand that globalization is the averaging of wealth across all nations. We're the richest nation on earth. If globalization insists that the U.S. regress to the mean..... well... I'll let you figure out the rest of this math problem on your own.

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It never ceases to amaze me that people don't understand that globalization is the averaging of wealth across all nations. We're the richest nation on earth. If globalization insists that the U.S. regress to the mean..... well... I'll let you figure out the rest of this math problem on your own.

It never ceases to amaze me that people actually believe that agents engaging in transactions is a zero sum game. China invents cheaper tires, I profit by saving money. The Chinese firm profits by entering a new market and undercutting their competitors. Both sides become richer, which is the whole point of trading with other people.

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It never ceases to amaze me that people actually believe that agents engaging in transactions is a zero sum game. China invents cheaper tires, I profit by saving money. The Chinese firm profits by entering a new market and undercutting their competitors. Both sides become richer, which is the whole point of trading with other people.

But are you really better off with the cheaper tires? Will they last as long or drive as well as more expensive tires? Cheaper is rarely better.

Edited by Cubical-aka-Moltar
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You haven't told the whole of the story.

It never ceases to amaze me that people actually believe that agents engaging in transactions is a zero sum game. China invents cheaper tires, I profit by saving money. The Chinese firm profits by entering a new market and undercutting their competitors. Both sides become richer, which is the whole point of trading with other people.

As those low priced tires enter the market and drive out competition, companies in the U.S. close. With those closures go jobs. With those jobs goes tax revenue.

So now the states, which still have to fund things like roads and schools, have less money, they are forced to raise taxes. If your state sales tax goes up just 1/2 point, the dollar amount in taxes you pay on $10,000 in purchases goes up $50. Good thing you saved, what $35 on those Chinese tires because Massachusetts just raise their state sales tax 1.25 points from 5% to 6.25%. On $10,000 worth of consumer goods, that works out to be an additional $125!

However, that tax rate was all the legislature could politically muster. In reality, the state needs an even higher tax rate to cover all it's obligations properly. Little things get skimped on like education and road repair. Wait a minute... road repair? That pot hole you just hit threw out your alignment and now you have to spend $75 to get it fixed. Oh, and that state scholarship you were going for didn't come through because there wasn't the budget to fund it..... which will really hurt since the tuition at the state colleges just got raised 7.7%

But still... you got a great deal on tires.

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