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More than just politics behind tariffs

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The Obama administration is at it again, filing a complaint with the World Trade Organization (WTO) about Chinese-made imports to the U.S.

Just like three years ago, it involves the rubber industry.

And just like the consumer tire case of 2009, the trade dispute against Chinese auto and auto part imports into the U.S. is a political act—but also more.

The 2009 case initiated by the United Steelworkers union against Chinese tire imports ultimately resulted in three years of prohibitive duties against Chinese-made tires. The decision by the president certainly looked like payback to the union movement—a big supporter of Barack Obama—soon after he took the nation's top job. At the same time, though, there was no doubt China was flooding the U.S. with tires and jeopardizing some American jobs.

The overall effect was something of a wash, since other low-cost nations filled the gap left by the cutoff of Chinese-made tires, and lower value consumer tire manufacturing already largely had migrated abroad. Now, as the higher duties come to an end, Chinese-made tires are expected to return, in force.

The auto and car parts sectors have been in a similar situation. In the final months of the presidential campaign, President Obama's action again shows his empathy for workers who support him, and it adds to the street cred he obtained by saving the U.S. auto industry and all those dependent on it.

But again, there's more than just politics at work here.

The imbalance of auto parts trade with China has risen dramatically while U.S. auto parts industry employment has tumbled. The so-called “level playing field” has been tilted toward China for decades.

Politics or not, the trade complaint with the WTO is no surprise. And the rubber industry is in the thick of it.



This editorial appeared in a recent print edition of Rubber & Plastics News, an Akron-based companion publication of Tire Business.
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