Tire Manufacturer Disappointed in Protectionist Decision by International Trade Commission

WASHINGTON, June 29 -- The U.S.-based unit of China's largest tire manufacturer expressed disappointment Monday in a protectionist decision by the International Trade Commission. The ITC recommended imposing additional duties against Chinese-made vehicle tires.

"We are disappointed that four of the six ITC Commissioners today felt compelled to take a decidedly protectionist path and recommended that the U.S. government impose an additional duty against economy tires made in China. The proposed remedy if enacted will not help U.S. workers. Chinese-made tires have filled a market void created when U.S. manufacturers abandoned the economy segment of the mass market," said Vic DeIorio (pronounced "dee-OAR-e-o.") DeIorio is executive vice president of GITI Tire in the U.S.

"The duty will not have the effect of increasing domestic production of low-cost tires - it simply will not help U.S. workers. Rather, the result will be that American tire manufacturers will continue to focus on premium tires, as they have said they will do."

"If there is a barrier placed on tires produced in China, U.S. manufacturers and distributors will simply increase importation of tires from other countries, such as Venezuela. What's more, duties will result in higher tires prices for American consumers at a time when they can ill afford it," DeIorio added.

Four Commissioners proposed duties on the tires of 55% the first year; the second year at 45%; and the third year at 35%. But two of six ITC Commissioners - Commissioners Okun and Pearson - today echoed the view that duties would do more harm than good.

The ITC decision is not binding. President Obama has until September to weigh the proposed remedy. The protectionist recommendation comes as President Obama has spoken out against enacting protectionist measures.

"At a time when the economy worldwide is still deep in recession and we've seen a significant drop in global trade, I think we have to be very careful about sending any protectionist signals," President Obama said Sunday.

DeIorio stressed that the ITC should have focused on helping the domestic tire industry innovate and upgrade their facilities. The ITC should also have directly addressed complaints about foreign labor and environmental standards and fashioned a recommendation for the Administration that moves the Chinese tire industry as a whole to improve labor and environmental standards in their manufacturing facilities, he said.

The Administration has a broader set of responsibilities, and a wider vantage point to devise a successful solution in this case that actually helps U.S. workers, DeIorio said.

"Building a bridge of innovation to the future rather than a road of protectionism to the past is the way in which the Administration can best ensure the industry's future," he said.