U.S. tire shipments are projected to drop by approximately 16% in 2009, mostly as a result of a nearly 45% decline in Original Equipment Manufacturer (OEM) passenger tires and almost 43% drop in OEM Commercial truck tires, according to the latest numbers from the Rubber Manufacturers Association.
Total 2009 tire shipments are projected to decline approximately 45 million units to 237 million units. This level is approximately 84 million units less than the peak of 321 million units in 2000. The decrease in tire shipments reflects the recent struggles of automotive manufacturers, low consumer confidence, high unemployment, and depressed home values, the trade group says.
The latest blow to the struggling industry comes as the U.S. Trade Representative is considering imposing tariffs on the imports of Chinese tires after the International Trade Commission (ITC) found that tariff relief was necessary to reduce tire imports.
The USTR remedy recommendation will be delivered to President Obama by Sept. 2, 2009. The President’s decision on how to respond to surging tire imports from China, which has resulted in massive job losses and factory closures, is due on September 17th.
Like so many candidates, Senator Obama talked tough about protecting U.S. jobs and trade during the campaign, but there’s been slight evidence that President Obama differs in any significant way from the Bush Administration’s disastrous economic policies on trade. The Steelworkers, of course, were one off candidate Obama’s strongest supporters.
ITC commissioners last month found a market disruption and recommended that tariffs be placed on passenger and light truck tires from China – 55% in year one, 45% in year two and 35% in year three.
The United Steel Workers Union, which brought the legal action, claims it is urging a higher tariff in the first year so domestic tire workers get the full relief prescribed to prevent the frontloading of inventories by Chinese exporters or U.S. importers who are dumping higher volumes prior to the President’s decision.