You can almost hear some tire dealers, skipping along on the yellow brick road of profitability, still worried about what the future might portend.
"Tariffs and duties and price hikes," they might say. "Oh my!"
The Trump administration and the U.S. Department of Commerce have thrown some landmines on this path to prosperity, proposing 25-percent tariffs on tire-quality steel wire rod imports to the U.S., as well as substantial antidumping and countervailing duties on 10 countries that export carbon and alloy steel wire rod to the U.S., including three that are exporters of tire-grade steel rod.
And that doesn't include the latest twist in road: At least four categories of tires are on the list issued by the Office of the U.S. Trade Representative of goods imported from China that are subject to a 25-percent tariff.
So, what can dealers expect to happen once all of this shakes out? What lever will the omniscient wizard who sits in his proverbial castle pull?
Will tire prices spike because of these latest disruptions, as many observers, including the U.S. Tire Manufacturers Association (USTMA), fear?
Will the tariffs have little effect on prices, as at least one analyst tells Tire Business?
Or will tire prices embark on a roller-coaster ride that leaves manufacturers, dealers and ultimately consumers dizzy and nauseous?
Our guess, at least at this early juncture, is the outlook may not be as foreboding as it seems.
First off, most tire cord-quality wire rod comes from seven countries, and only one of those, Japan, has not been excluded from the tariffs. More than half of the tire-grade steel for U.S. tire cord and wire producers comes from Brazil. Japan accounts for about one-fourth of the import total, with five other countries accounting for the rest.
So at least as it stands today, just one-fourth of the tire cord-quality steel rod is subject to additional tariffs.
The same logic applies to anti- dumping and countervailing duties. Steel rod imported from Spain, South Korea and the United Kingdom are subject to duties ranging from 11 percent to 148 percent.
Those three countries, combined, account for just 14 percent of all tire-quality steel rod that is imported into the U.S.
Could that mean a price hike? Almost definitely, but it might not be as high as it would seem.
Consider that steel wire accounts for about 5 to 8 percent, roughly speaking, of a tire's cost. More steel goes into a commercial tire, so that percentage would be greater, of course, than a passenger tire.
Independent tire industry consultancy Tire Consultants Group L.L.C. of New York told Tire Business that it expects elevated steel tariffs to have no effect on the price of a passenger tire and only minimal effect on the price of a truck tire. "Demand and capacities will dictate pricing in the commercial space," it said.
Of course, the volatility of the market, as well of the current administration, could change that. But at this point, it might be too early to worry.
Just continue to pay attention to that man behind the curtain.