Bloomberg reported that the United Steelworkers union asked President Mr Barack Obama to cap automobile-tire imports from China, saying the lower priced goods are costing US jobs.
The union said the union, which represents tire-factory workers, filed a petition with the US International Trade Commission April 20th to cut imports of automobile tires from China by more than half to 21 million, the level in 2005. China sent 46 million tires to the US in 2008 valued at USD 1.7 billion
Mr Leo Gerard president of the United Steelworkers said "The Chinese import surge has been a significant factor that has led to the idling of factories. The union represents about 15,000 tire workers at 13 plants including those owned by Bridgestone Corp and Goodyear Tire & Rubber Co.”
US makers of steel, textiles and other products have blamed last year's record USD 266 billion trade deficit with China on the Asian nation's subsidies, currency value and import curbs. The petition filed April 20th will be the first test of Mr Obama's campaign pledge to increase trade enforcement.
Mr David Spooner who led the Import Administration office at the Commerce Department under Mr George W Bush said "Mr Obama will be hard-pressed to reject this petition given that pledge.”
Mr Spooner who is now a counsel at the law firm of Squire Sanders & Dempsey LLP in Washington said "And if he said yes to this one, it will surely lead to a flood of additional complaints. There is a lot of pent up demand."
Former President Mr George W Bush during his eight years in office, turned down every request for general safeguards, which calls for the government to impose import quotas or tariffs to protect domestic industries from foreign competition deemed unfair. Mr Bush did impose separate textile specific caps on socks and other products before negotiating across-the-board apparel quotas with the Chinese.
According to the government funded International Rubber Study Group in Singapore, tiremakers are already facing a drop in demand as the global recession cuts into auto sales and delays purchases of replacement tires. Tiremakers may report a 6.8% sales slump in 2009.
The Federal Highway Administration said US auto sales plunged 37% in March and the annual rate fell to the lowest in more than 25 years in February. US vehicle miles traveled fell by 7 billion or 3.1% in January from a year earlier.
(Sourced from Bloomberg)
