With the one-year anniversary approaching of President Obama’s decision to provide relief on imports of Certain Passenger Vehicle and Light Truck Tires from China‚ the United Steelworkers (USW) pointed to a report issued today by the Alliance for American Manufacturing (AAM) that shows the tariff is achieving the desired positive effect on U.S. tire manufacturers and their workforce.

“The relief provided by President Obama is fulfilling a promise that permitted China’s entry into the World Trade Organization—and that promise was American workers and companies would not be harmed by non-market economy distortions in China,” said USW International President Leo Gerard. “With relief in place, American workers are finally beginning to see jobs return to their communities. We must maintain that momentum and allow the tariffs to stay in effect for the full three years. To do otherwise would be to break the repeated promise to American workers and companies that they would not be unfairly harmed.”

The USW in 2009 sought an investigation into an unprecedented surge of Chinese tires under Section 421 of the Trade Act of 1974, which was designed to give the domestic industry and its workers breathing room from surging imports.

“Section 421 of the trade law is doing what it is intended to do,” Gerard added. “As AAM’s report clearly defines, it has reversed a massive decline in domestic production and provided much needed relief to workers, their employers, and communities from a flood of Chinese tires.”

The Trade Act provision was an important commitment made by the Chinese to permit its entry into the World Trade Organization (WTO), the USW said, and was designed to facilitate the mutually beneficial growth in trade by reducing the adverse effects of distortions inherent in China’s non-market economy.

When the International Trade Commission (ITC) examined the surge in tire imports from China, it discovered material injury to the domestic industry through continuous declines in U.S. producer’s domestic capacity, production, shipments and employment from 2004 to 2008, a period of general economic growth.

Notably, domestic capacity declined from 226.8 million tires to 186.4 million tires during the four-year period while actual production dropped from 218.4 million tires to 160.3 million tires, the USW said. “As capacity utilization fell from 96.3 percent to 86 percent, the number of production workers substantially declined as did their hours worked and wages.”

“There is no doubt that the relief authorized by the President has reversed the massive decline in domestic production,” USW International Vice President Tom Conway said.

A full copy of AAM’s new report, “Obama’s Bold Economic Move on Chinese Tire Imports is Paying Off,” is available at www.usw.org/tires

Posted 9/1/2010