(Reuters) U.S. lawmakers on Tuesday urged President Barack Obama to slap limits on imports of tires from China, saying a surge of low-cost tires was damaging U.S. industry and throwing Americans out of work.
At a hearing of the International Trade Commission, the Democratic lawmakers said they hoped Obama would break with the practice of the Bush administration and instead use U.S. laws that allow quotas in some cases.
Indiana Democratic Senator Evan Bayh warned that U.S. protectionism would grow if action was not taken. "I simply don’t believe that there will be further trade agreements unless the current rules are enforced," Bayh said.
The lawmakers backed a petition from the United Steelworkers union asking Obama to impose a quota that would restrict Chinese tire imports to 21 million, taking them back to 2005 levels.
The tire dispute comes as U.S. Treasury Secretary Timothy Geithner is in China, where he has sought to soften the tone on contentious issues such as Beijing’s currency policy.
The steelworkers’ union said more than 5,100 U.S. workers have lost jobs because of low-price Chinese tire imports that increased 215 percent in volume from 2004 to 2008. It said the surge of 46 million tires was worth $1.7 billion in 2008.
The union cited closings of U.S. plants by Goodyear, Continental Tire, and Bridgestone, and said more closings are pending.
During his presidential campaign last year, Obama promised he would not routinely reject petitions for restricting imports from China, as had his predecessor, George W. Bush. Obama won strong labor support in his bid for the White House.
Lawyers representing Chinese tire producers asked why U.S. tire producers, who were supposed to be experiencing injury, were not present.
The steelworkers responded that the Chinese had intimidated the U.S. tire companies that also had factories in China.
"To be very blunt, a number of them have said they are concerned about Chinese retaliation," said Leo Gerard, the steelworkers’ president.
Chinese tire producer Giti Tire argued against any quotas, saying China was filling a need by supplying low-cost tires.
"The decision by major U.S. tire producers to abandon U.S. production capacity of lower-cost tires preceded – rather than followed – major import increases," Vic DeIoria, executive vice president of Giti Tire in the United States, said in a statement.
The commission is not expected to decide on the case until later this month. If the panel rules for the union, Obama would have 90 days to decide what, if any protection, to provide. (Courtesy of Tire Review)
