September 12, 2009

At Senator Gillibrand's Urging, President Obama Rules in Favor of WNY Tire Industry Workers

Import Surge Forced Jobs Losses In Tonawanda - Decision Protects 1,000 WNY Jobs

Washington, DC - At the urging of U.S. Senator Kirsten Gillibrand, late last night President Obama determined that a surge of tire imports from China has injured domestic tire industry workers and imposed a tariff.  In April, Senator Gillibrand called on the International Trade Commission (ITC) to hold a hearing on this issue and in May expressed her support for the petition, urging action to help preserve close to 1,000 jobs at the Goodyear-Dunlop facility in Western New York. In July, Senator Gillibrand joined with a bipartisan group of 10 Senators to urge President Obama to adopt recommendations made in June by the ITC.

"I am pleased that President Obama determined that an import surge of tires from China is adversely affecting the domestic industry," Senator Gillibrand said.  "Over the last four years, tire imports from China have increased by more than 200 percent in volume and close to 300 percent in value. This dramatic increase in imports - close to 46 million tires - has disrupted the market for many of our domestic tire manufacturers, affecting jobs in New York and across the country. President Obama's decision will help to fairly enforce our trade agreements and provide relief for our workers."

Section 421 of the Trade Act of 1974, allows companies or workers to petition for import relief when they can demonstrate that a surge in a particular product from China has caused or threatens to cause injury.  This safeguard mechanism was created in 2000 as part of the process of bringing China into the World Trade Organization, and was agreed to in both China and the United States.

In its petition in this case, the United Steelworkers (USW) demonstrated how imports of passenger vehicle and light truck tires from China between 2004 and 2008 led to sharp declines in domestic production and over 5,000 job losses.  The petition presented data illustrating there was a 215 percent increase in imports by volume and a 295 percent increase in imports in terms of dollar value over the five-year period from 2003 to 2008.   The petition laid out convincing evidence that the import surge has led to sharp declines in domestic production and job losses that exceed 5,000.  The evidence also showed that imports were expected to grow unless controls were put in place.

President Obama's decision will lead to a tariff on tires from China at 35 percent the first year, and 30 and 25 percent the second and third year respectively. The tariff will go into effect September 26.