US Tire Makers Oppose New Restrictions On Chinese Tires - It's A Union Thing

The United States International Trade Commission issued a split 3-3 ruling on a petition regarding Chinese tires filed by the United Steel Workers under U.S. Antidumping and Countervailing Duty (AD/CVD) laws. That means that — in all likelihood — the United States will put tariffs or other controls on tires imported from China. Counterintuitively, not one of the nine domestic American tire companies that produce 100 percent of the tires made here supports the AD/CVD petition.

Don Ikenson at Forbes explains the domestic tire producers’ lack of support for the ruling is due to the steel workers union not really being interested in stopping Chinese imports, but rather gaining power to use against their negotiating partners here in the United States.

The United Steel Workers represents about 40 percent of American tire workers. They were the sole petitioner that argued the domestic manufacturers are the victims of unfair trade. The problem with that argument: over the period of investigation, not only were all nine domestic producers profitable, but also that their profit margins increased at a better rate than either those of the automotive industry or the entire manufacturing sector.

The domestic tire industry is healthy. Capacity utilization in the industry during the investigation was right around 90 percent. To meet anticipated demands, three new entrants in the U.S. tire market will be spending $1.75 billion on new tire factories in the United States. Goodyear has announced $500 million in plant expansions — and that’s on top of $2.4 billion the domestic producers have recently invested in capital improvements.

That hardly sounds like an industry that’s suffering from unfair trade.

Part of the health of the domestic tire producers is because they don’t directly compete with Chinese tires. Domestic producers decided a while ago to focus on premium OEM and replacement tires, leaving the budget and economy side of the business to Chinese producers willing to exchange margins for volume. At the same time, eight of the nine domestic producers make their low-cost tires overseas. The controls on imports wouldn’t help the domestics sell the tires they make in the United States and also make it more expensive to import cheaper tires from China.

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  • SC5door SC5door on Jul 15, 2015

    As with Korea, the Chinese tire industry will catch up eventually. Not long ago I bet people wouldn't have touched a "Made in Korea" they supply OEM tires for many manufacturers. (Hankook is to open a plant in Tennessee in 2016)

  • Taxman100 Taxman100 on Jul 16, 2015

    I just bought some Kumho's for my 16 year old beater. I figured at a minimum they were made in Korea. I had Pirellis made in Brazil that lasted 76,000 miles, but Pirelli is now owned by the Chicoms. Turns out the Kumhos were made in China. Outside of the economics, I'm not a big fan of Godless socialist, crony economies. I bought some Kelly's last year for another car that were made in the United States - should have done that again. Then again, it is clear the United States government is a Godless, socialist entity as well, along with the vast majority of large multinational U.S. corporations. Management of both are loyal to only what benefits them - power, control, and their stock options.

  • Garrett I would have gone for one of these if it had AWD. If they had offered it, it could have done far better.
  • Michael500 Sorry, EV's are no good. How am I supposed to rev the motor to impress girls? (the sophisticated ones I like).
  • Michael500 Oh my dog- this is one of my favorite cars in human history! A neighbor had a '71 when I was a child and I stopped and gazed at that car every time it was parked outside its garage. Turquoise with a black vinyl. That high beltline looks awesome today!
  • ScarecrowRepair I'd love an electric car -- quiet, torque, drive train simplicity -- but only if the cost was less, if recharging was as fast as gas (5 minutes) and as ubiquitous. I can take a road trip and know that with a few posted exceptions (US 50 from Reno to Utah), I don't have to wonder where the next fuel station is, and if I do run out, I can lug a gallon of gas back.Sure I'd miss the engine sounds and the joys of shifting. But life is all about tradeoffs.
  • Tre65688381 Let's face it, aside from the romanticized, visceral sounds of a robust V8/V10/V12, many if us appreciate raw torque and power enough that if our preferred poison is adequately met (track, drag, street, canyon carver, etc) we don't care whether it runs on liquid or current. The batteries just can't ruin the dynamics or the practical range.That said, I would still really miss the sound of a V8 bubble at start up, and at wide open throttle, yet would feel silly piping it into my electric car. Like an adult version of a baseball card in the bike spokes.