It's nearing the first anniversary of the U.S. government's decision to impose stiff duties on imported Chinese consumer tires, but there's little reason to celebrate.
The tire tariffs enacted by the Obama Administration so far have not done much, if anything, to curtail the importation of tires into the U.S. or to stimulate an increase in domestic tire manufacturing.
Sure, if the goal was to slow the flow of Chinese passenger and light truck tires into the U.S., the tariffs have had some impact. Yearly imports of these tires from China are tracking at 25 million units, down about 40 percent from before the tariffs were enacted. But it hasn't stopped them.
With the tariffs set to drop by 5 percent in the second year to 35 percent, drop another 5 percent a year later and then return to 4 percent in 2012what they were before the duties were increasedit's only a matter of time before business returns to the way it was before the U.S. government acted.
While the United Steelworkers union has not commented publicly since April on the effects of the first year of the tariffsthe union originally petitioned the government for quotas on imported Chinese tiresit can't be pleased with the outcome of them so far.
The union's goal was to slow the importation of tires from China with the hopes that U.S.-based tire makers and foreign companies with factories here would seize the opportunity to ramp up domestic production. That hasn't happened, whether it's because of the short duration of the tariffs or because demand slumped during the recession-plagued previous year or for some other reason.
The U.S. government also can't be thrilled with the results to date.
Car tire imports to the U.S. over the nine months since the tariffs' imposition actually rose by 7.8 percent to 80.3 million units. The tariffs haven't done anything to slow the importation of tires, even in a recessionary economy.
Tire companies also can't be pleased with the tariffs' impact. All they have done is forced companies, at considerable expense, to reallocate to plants in different low-cost countries the tires they were going to export to the U. S. from China.
The impact of this shows up in the latest import data: Tires shipped from Taiwan to the U.S. doubled over the last nine months, those from Indonesia rose 70.5 percent, from Thailand, 64.2 percent and from South Korea, 63 percent. So much for slowing the flood of tire imports.
Tire dealers and distributors also have little to celebrate. The tariffs have disrupted their supply and in some cases forced them to establish new sources of tires.
And for recession-weary consumers, all the tariffs have done is contribute to higher tire prices.
The issues of tire importation and the decline in domestic production are not going to go away once the tariffs program ends. If the goal is to create a more equitable playing field and a better climate for domestic manufacturing, the federal government needs a better solution than a short-term discouragement.