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August 27, 2018 02:00 AM

New tariffs would cause 'severe economic harm,' ACA CEO says

Tire Business Staff
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    Hanvey

    WASHINGTON — Costs associated with the imposition of additional tariffs on Chinese goods under Section 301 provision "would cause severe economic harm to the U.S. automotive industry and U.S. consumers," Auto Care Association President and CEO Bill Hanvey testified Aug. 23 before the U.S. Trade Representative (USTR) in Washington.

    The proposed tariffs are part of the USTR's Section 301 investigation to address unfair acts, policies and practices by China that are related to technology transfer, intellectual property and innovation. Two tariff lists on imports from China already have been finalized and duties have gone into effect.

    "The greatest impact from this action will be on U.S. consumers who will experience higher repair costs, likely leading to the delay of critical vehicle maintenance procedures that may result in serious highway safety concerns," Mr. Hanvey testified at hearings held the week of Aug. 20.

    An example of this is brake rotors, he said, which longer are manufactured in the U.S. despite increased demand due to the number of vehicles on the road.

    "Considering that there are over 2,600 different part numbers in the brake rotor sector, there is no viable option to meet the demand, nor any source of the parts in the U.S. market for every year, make and model vehicle on the road," Mr. Hanvey said.

    "Therefore, regardless of any tariff imposed, brake rotors will continue to be imported, the vast majority from China."

    Mr. Hanvey explained that imposing tariffs would raise prices for consumers and delay repair of critical vehicle wear items that need to be replaced to ensure passenger and pedestrian safety.

    The ACA urges the Trump administration to continue engaging in dialogue with China to protect U.S. investments and promote free, fair and reciprocal trade, but the trade association does not believe the imposition of tariffs would eliminate China's unfair trade practices. Instead it would raise prices for U.S. consumers, and cause U.S. companies to be less competitive in the U.S. and in global markets.

    Mr. Hanvey was one of eight tire and/or automotive aftermarket industry representatives who testified on the Section 301 tariffs.

    Others were: Walter Weller, China Manufacturers Alliance L.L.C.; Jason Rook, Tube & Solid Tire Ltd.; Tim Miller, Lionshead Specialty Tire & Wheel; Derek Zhang, Transamerica Tire Co. Ltd.; Dennis Mangola, Chatsworth Tire Inc./DMC Consulting Inc.; and Ann Wilson, Motor & Equipment Manufacturers Association (MEMA).

    Mr. Hanvey's full testimony can be read on the ACA's website.

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