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New tax requested by United Steelworkers union. Company is making low-end tires at Asian plants
By Mark Drajem
Bloomberg News
Published on Tuesday, Aug 25, 2009
Cooper Tire & Rubber Co., the Findlay-based second-largest U.S. tiremaker, said it opposes levying tariffs on Chinese tires, breaking with its union workers who asked President Barack Obama to cap surging imports.
Cooper was joined by the U.S. unit of Japan-based Toyo Tire & Rubber Co., which has a plant in Atlanta. Both companies said the tariffs would prevent them from importing low-cost tires that they make in China to complement the premium tires they make in the U.S.
''Cooper Tire invested in China because it could not compete on costs with lower-cost tires being imported by other U.S. producers and importers from many different countries, not just China,'' the company said in a filing to the U.S. Trade Representative's office. ''The tires produced in China are made at a lower cost and allow Cooper Tire to even out its overall production costs.''
Cooper said it can make tires cheaper in China because of lower costs for labor, raw materials and litigation.
The trade representative's office is scheduled to make its recommendation next week to Obama about whether he should rule in favor of a petition by the United Steelworkers union and impose tariffs or quotas on Chinese imports.
The independent U.S. International Trade Commission recommended that he impose duties
for three years, starting at 55 percent the first year. Tariffs that steep would effectively block imports of tires from China, Cooper and Toyo said.
Goodyear, the largest U.S.-based producer, has not taken a position on the case, with the company saying it supports ''free and fair trade.'' Goodyear also has a plant in China, but imports from China represent less than 2 percent of the tires sold in North America, said spokesman Keith Price in an e-mail on Aug. 7.
The steelworkers union, which represents 15,000 employees at 13 tire plants in the U.S., filed a petition in April asking for quotas on the tire imports, which are valued at $1.7 billion a year.
Obama pledged during the election campaign to take a harder line against Chinese trade barriers. The so-called safeguard decision, which Obama must make in September, will be the first test of those campaign pledges.
Former President George W. Bush, turned down every request for general safeguards, saying they would do more harm than good to the U.S. economy.
Cooper, which had taken a neutral stance on the petition before its filing to the trade office last week, said it did so ''because of the need to maintain good relations with the USW and its members who work for Cooper Tire.''
Gary Hubbard, a spokesman for the Steelworkers, said the petition by Cooper shouldn't affect Obama's decision.
''We have a name for this process: the race to the bottom,'' Hubbard said in an e-mail. ''We filed this case to put the brakes on that race to the bottom so our domestic industry would have the chance to regroup, recover, and invest in its future.''
Cooper Tire & Rubber Co., the Findlay-based second-largest U.S. tiremaker, said it opposes levying tariffs on Chinese tires, breaking with its union workers who asked President Barack Obama to cap surging imports.
Get the full article here.
Comments
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Akron, Oh
Posted 07:03 AM, 08/25/2009
We should all oppose tariffs on imports, it fixes nothing and only raise the price on goods. If America wants to be productive again they'll need to figure how to compete with these countries. Simply adding a tariff will only increase the costs to consumers and does nothing else. Just another tax increase, grab your ankles America.
Posted 11:53 AM, 08/25/2009
The US business cannot compete in certain sectors because of laws that are in place to protect the environment and employees when there are countries that do not have such laws, it creates an unfair trade market. Not to mention currencies that are kept artifically low to make our dollar weaker than it already is...
Now the question is...I wonder how many of these union guys shop at non-union stores....which compounds the plight they are in already.
I would have thought you would have known this with a username of "usecommonsense"....
