President Obama Increases Duties on Tires Imported from China

On September 11, 2009, President Obama announced that the United States will impose a 35 percent tariff on passenger vehicle and light truck tires imported from China for a period of three years in order to remedy a market disruption caused by a surge in time imports. The White House stated that:

As part of its accession to the World Trade Organization (WTO), China agreed to a special safeguard mechanism that would allow its trading partners to implement remedies in response to import surges and under other circumstances.  The President decided to remedy the clear disruption to the U.S. tire industry based on the facts and the law in this case. The additional duty to passenger vehicle and light truck tires - complementing the existing 4 percent duty- will be set at 35 percent ad valorem for the first year, 30 percent ad valorem the second year, and 25 percent ad valorem the third year.     

The New York Times reported that the decision is the first time the United States has invoked the special safeguard provision of China's WTO entry and is a break from the previous administration's practices. Under the safeguard provision, American companies or workers harmed by imports from China can ask the International Trade Commission (ITC) for protection by demonstrating that American producers have suffered a "market disruption" or a "surge" in imports from China. Unlike traditional antidumping cases, the ITC does not have to determine that the country is selling its products at less than fair market value or that the country is competing unfairly.

The ITC determined that Chinese tire imports were disrupting the $1.7 billion market and recommended that the President impose the new tariffs on June 29, 2009. President Obama had until September 17, 2009 to make his decision.