The United Steelworkers had a big hand in putting Barack Obama in power. Now they want some payback. The United Steelworkers lodged a complaint that a flood of cheap Chinese tires had cost more than 5,000 union jobs in recent years. Obama has until Sept.17 to rule that the White House put a 55 percent tariff on tires imported from China. Which would be the end of Chinese tire imports. Tires? Steelworkers?
Well, the tires are steel-belted.
One would think that U.S. tire makers are excited about getting rid of cheap Chinese imports. Not so. “Most major U.S. tire manufacturers have tire plants in China or import from there.,” writes the Washington Post. The increasingly popular budget end of the tire market has been nearly completely moved to low-cost producing countries. The 5000 union jobs were lost, because Americans want cheap tires. The tariff would hurt American companies who import them, and American buyers who would have to pay for more expensive tires. And it’s not that Chinese tires have taken over the industry. “The value of Chinese tire exports to the U.S. totaled $1.8 billion last year,” writes the Wall Street Journal, “in a market segment worth $16 billion a year.”
American tire distributors and retailers are likewise against a trade war about tires. They “say import penalties will do more harm than good, costing jobs and forcing Americans who rely on affordable tires to continue driving on old, worn tires,” writes the WSJ.
The Chinese government is appealing to the wisdom of Obama, who shouldn’t risk a trade war over some steel belted radials. Just in case wisdom won’t prevail, China is preparing for the worst.
“The Chinese government will not turn away from issues that will harm the interests of Chinese industries. Officials from the Bureau of Fair Trade for Imports & Exports with the Ministry of Commerce said China has prepared an assortment of plans for countering different possible results from the Obama administration,” writes China Daily. One of the retaliatory options on the table: A hefty tariff on US auto imports. During the first half of the year, China imported more than $1 billion worth of automobiles from the US. About the size of Chinese tire exports. A nice tit-for-tat.
If the US slaps punitive tariffs on tires, then the Chinese will make imported Fords and Chevys so expensive that a Mercedes S-Class looks like a bargain. All the while, cheap tires will continue being imported from other countries. $5.1b of tires are already being imported from elsewhere. With the tariff on Chinese tires, it will be $6.9b from elsewhere. No new jobs in America. The UAW will be ever so grateful to their USW union brothers for losing them even more jobs. Morosity reigns. Has everybody forgotten that there are more elegant ways to stop Chinese tires?
People I know have had good success with Korean-made tires. Not brave or cheap enough to try Red Chinese tires. You’re a long time dead! But how do you know where they’re from if they are branded with domestic names?
***People I know have had good success with Korean-made tires.***
A lot of the Korean-brands (and Japanese) tires are made in China too.
Blame customers who shop on nothing but price and the incessant pressure from Mega-Lo Mart to cut costs (and lax environmental/labor regulation in China).
Reagan tried this trick with the Japanese, and they slapped him around reminding him about who’s financing the debt here. I suppose since the Chinese now have us by the same short hairs, this will be an issue shortly, when telling them no about anything.
We long ago sold our country to the Chinese. Do you think, with massive debt having to be bought, and China the only country even sort of willing to buy it, Obama-Geitner-Bernanke are going to mess with the formula?
Maybe they should realize we don’t make as many tires domestically as we used to before we saddle the consumer with this tariff. Because it is the customer that takes one for the team not the producer or the country. With a protected market the few remaining domestic manufacturers will indeed have reason to celebrate higher profits. How this translates to higher union wages remains to be tested, since trickle down is derided by the left when it comes to tax cuts and while they expect protectionism to trickle down to workers just the same.
Continuing to import vastly more than the US exports is not a long-term sustainable proposition. Last year we learned that the idea “real estate only goes up” was never true. Sometime soon the “import all you want as long as the price is cheaper” doctrine will also do a face plant.
The reason China has so many $US to lend is that China has been selling much more output to the US than it has been buying from the US. Such massive imbalances cannot go on growing forever.
“Most major U.S. tire manufacturers have tire plants in China or import from there.,”
Yet we are supposed to be loyal and buy “american” if we can figure out what that is.
Screw Chinese tires. We aren’t going to prosper by creating jobs in China.
China has been selling much more output to the US than it has been buying from the US. Such massive imbalances cannot go on growing forever.
Sure they can because a guy in the US buys tires from a guy in China and as long one can supply and the other can pay for them than a national trade imbalance can last forever.
Screw Chinese tires. We aren’t going to prosper by creating jobs in China.
How do you prosper by having to buying relatively more expensive american tires or is one just meant to bask in a warm patriotic glow?
“Screw Chinese tires. We aren’t going to prosper by creating jobs in China.”
I want to see your vision go down.
China holds and continues to buy worthless Treasuries and funds deficit spending by America Land of Fools.
Does anyone know what happens when you combine Melamine and Rubber? Someone in China is looking at the “problem” now.
Does anyone know what happens when you combine Melamine and Rubber
A set of blue plates?
Two words…death wish.
They’ll kill a couple of thousand Americans before anyone realizes there’s a problem.
Reagan saved the U.S. motorcycle industry. While Reagan was a free-trader, he was not an academic on the subject – he knew the real world doesn’t exactly work like an economics class.
There is a smart way (Reagan) and a stupid way (Bush and Obama) to help U.S. companies get back on their feet. It helps to have good management, and let government get out of the way to let them rebuild themselves.
Let China stop buying U.S. bonds – that would be one way to stop deficit spending. It would suck in the short term, but our children and grandchildren will thank us.
Imported tires will destroy another U.S. industry if left unchecked.
How do you prosper by having to buying relatively more expensive american tires or is one just meant to bask in a warm patriotic glow?
How do you prosper when everything sold here is made somewhere else? Who’s going to buy tires or anything else when nobody has a job?
China has not bought the US yet.
I read article in Shanghai news a few months ago on world real estate. It was fundamental approach, talked of china population and acreage world wide and how many fit on acre and how many acres are out there and what they cost per occupant and how China will be able to afford to buy for long haul.
Yes we (not me) sold them our future but they have not yet bought our indivdual assets.
And they are still “Red China.”
It was not the democrats who did this, its was business who did this. Both dems and repubs. I think Repubs own more businesses so they are more guilty. Otherwise it was all of us.
It didnt start with giving our industry to Chinese. It started with new england industries moving to southern US sites, then to 3rd world and it all winds up at China. And India. India is OK.
This could be prime time entertainment; watching who gets access to Obama; the unionists (and owners of the tire outfits)rambling on in the most oxygen sucking manner about the aspirations of the working man and then as they leave the Acorn people and the like, march in demanding how Obama should do something about the cost of living and how the poor battlers from struggle street get their faces ground into because of it.
What do you do Mr President? that the kind of decision that make you want go and cut scrub on your ranch (or rented estate on Martha’s Vineyard)
How do you prosper when everything sold here is made somewhere else?
how do you think the French feel about american (and English!!!!) rock music when they can’t produce anything more than an earache.
French rap is good, could be the fact that i don’t understand it but it sounds better than American rap
An easy way to ban ultra-cheap Chinese tires would be tightened tire regulations. Tests have shown incredibly bad handling characteristics especially in wet weather with cheapies. Getting rid of them could save possibly hundreds of lives every year.
Blame customers who shop on nothing but price and the incessant pressure from Mega-Lo Mart to cut costs (and lax environmental/labor regulation in China).
Excellent point and really, what is sad is that we really are in a race to the bottom. What happens when China stops or at least slows producing and manufacturing goods? Who will be the next “China” for consumers? Africa? Mars?
We traded paper dollars for industrial output. The Chinese sent us goods and while the quality is suspect on much of it the quality of US dollars has taken a sudden dive for the worst.
They will end up with depreciated worthless dollars and we get to keep the stuff we bought. I think we might get a slightly better deal. This explains the full on panic over deficit spending here over we see in Beijing.
What happens next? Well they could demand gold, the Saudis did during ww2 for oil. They could demand assets of another kind, like ownership of companies (cough GM cough) or they could try to demand payment in Euros. We might have to wash US dollars in Europe before getting that load of rubber duckies delivered over here.
This is all going to hit the wall soon. We are going to find out what happens when people who have no idea where money comes from start spending too much of it.
And cheap tires will be the least of our worries.