The President makes good on a campaign promise and enforces the law.
The White House announced late Friday night that it would follow the recommendation of the U.S. Trade Representative and impose tariffs for three years on Chinese-made tires starting in 15 days.
The three-year penalty, which adds an additional tariff on top of the current 4% of 35% ad valorem in the first year, 30% in the second, and 25% in the third, is being imposed after a finding by the United States International Trade Commission that a harmful surge of imports of Chinese tires disrupted the U.S. market for tires. An estimated 5,000 U.S. jobs were eliminated during the past five years, as Chinese imports tripled and seven U.S. tire plants closed.
President Obama also announced that Trade Adjustment Assistance would be targeted to help affected workers, industries, and communities immediately, while the tariff changes take effect.
“When China came in to the World Trade Organization, the U.S. negotiated the ability to impose remedies in situations just like this one,” said United States Trade Representative Ron Kirk.
President Bush chose not to do so in several similar cases under his administration.
“This Administration is doing what is necessary to enforce trade agreements on behalf of American workers and manufacturers. Enforcing trade laws is key to maintaining an open and free trading system,” Kirk concluded.
The trade panel had recommended a 55% tariff in the first year, 45% in the second, and 35% in the third year. The President decided the lower levels of 35%, 30% and 25%, according to Robert Gibbs, Obama’s press secretary.
Nonetheless, the decision is a victory for the United Steelworkers Union, which filed the trade complaint last spring under Section 421 of the 1974 Trade Act.