On Sept. 13, 2009, President Obama instituted a raise on tariffs excised on tires imported from China. While this current tire tariff is 4 percent, it was raised to 35 percent Sept. 26. According to this plan, in 2010, the tariff will then drop to 30 percent, and, in 2011, it will drop again to 25 percent.
Immediately following the announcement of this policy, Congressman Jeff Flake sent Obama a single page document that urged the President to rethink this tariff.
Flake, who is on the House Foreign Affairs Committee, contends that this new tire tariff will:
- Discourage open trade at an especially unfortunate moment, as the G20 Summit occurred at the end of September
- Increase the chances that China and other nations will start instituting similar protectionist measures
- Ultimately halt global economic recovery
According the Chairman of China Rubber Industry Association, Fan Rende, the extreme expense imposed by the new tire tariff may prevent Chinese tire manufacturers from exporting their products to the U.S. Rende estimated that:
- As many as 100,000 employees of Chinese tire companies could stand to lose their jobs
- Chinese exporters stand to lose around $1 billion
The new tire tariff, which is currently still in effect, has been applauded by labor groups and criticized by the Chinese government.
Interestingly, the world leaders who attended the G20 summit on Sept. 24 and 25 pledged, in a series of three meetings, to:
- Fight protectionism
- Avoid the mistakes made by economists who worsened the Great Depression
For more information about the tire tariff, contact The Killino Firm by calling 877-875-2927.