U.S. to Impose 35% Section 421 Duty on Tires from China Effective September 26, 2009
The Office of the U.S. Trade Representative has issued a press release announcing that the President has decided to impose remedies under Section 4211 of the 1974 Trade Act against imports of tires for passenger cars and light trucks from China.
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According to the President's proclamation, the affected tires are new pneumatic tires, of rubber, from China, of a kind used on motor cars (except racing cars) and on-the-highway light trucks, vans, and sport utility vehicles, provided for in HTS subheadings 4011.10.10, 4011.10.50, 4011.20.10, and 4011.20.50.
Add'l Duties of 35% for First Year, 30% for Second Year, and 25% for Third Year
The three-year remedies will consist of additional tariffs of 35% ad valorem in the first year, 30% ad valorem in the second year, and 25% ad valorem in the third year.
According to the Proclamation, additional tariffs will take effect for goods entered or withdrawn from warehouse for consumption on or after 12:01 a.m. EDT on September 26, 2009.
The President also announced that Trade Adjustment Assistance will be targeted to help affected workers, industries, and communities immediately, while tariff changes take effect.
Tire Remedy is the First Section 421 Import Relief to be Implemented
This case is the first to be decided by President Obama, and will be the first Section 421 import relief to be implemented.
Under President Bush, four Section 421 investigations on Chinese products occurred (pedestal actuators, steel wire garment hangers, steel pipe fittings, and circular welded non-alloy steel pipe), and recommendations were made for remedy; however, President Bush decided to take no action.
Tire Case Was Brought by Union, Concern That Other Unions Will File Section 421s
This case was brought by the United Steelworkers union, rather than domestic industry. Importers of other products are concerned that the USW's success will encourage other unions to file.
(In June 2009, the ITC proposed remedies to address its Section 421 determination that certain passenger vehicle and light truck tires from China are being imported into the U.S. in such increased quantities or under such conditions as to cause market disruption to the domestic producers of like or directly competitive products.)
1Section 421 investigations are a transitional safeguard tool to address import surges of Chinese products that cause or threaten market disruption. The procedure was negotiated as part of China's accession to the World Trade Organization, and is in effect until December 11, 2013.
Section 421 safeguards can be used to provide relief against any type of imports from China, including textiles and apparel.
(See ITT's Online Archives or 07/15/09 news, 09071520, for USTR request for comments on proposed Section 421 additional duties on certain tires from China.
See ITT's Online Archives or 07/14/09 news, 09071499 4, for BP summary of China stating it would oppose the ITC's proposed action.
See ITT's Online Archives or 07/02/09 news, 09070230, for BP summary of the U.S. requesting consultations with China on this issue.
See ITT's Online Archives or 07/01/09 news, 09070120, for BP summary of ITC's remedy proposals.
See ITT's Online Archives or 06/19/09 news, 09061940, for BP summary of the ITC's Section 421 determination.)
USTR press release (dated 09/11/09) available at http://www.ustr.gov/about-us/press-office/press-releases/2009/september/kirk-white-house-fulfilling-trade-enforcement-pl.
Presidential Determination No. 2009-28, dated 09/11/09, available at http://www.whitehouse.gov/the_press_office/Memorandum-For-The-Secretary-Of-Commerce-The-Secretary-Of-Labor-The-United-State-Trade-Representative/.
White House Press Secretary statement, dated 09/11/09, available at http://www.whitehouse.gov/the_press_office/Statement-from-the-Press-Secretary-on-the-Remedy-to-Address-Market-Disruption-from-Imports-of-Certain-Passenger-Vehicle-and-Light-Truck-Tires/.
Presidential Proclamation (unnumbered and without the Annex), dated 09/11/09, available at http://www.whitehouse.gov/the_press_office/Proclamation-Address-Market-Disruption-from-Imports-of-Certain-Passenger-Vehicle-and-Light-Truck-Tires/
United Steelworkers press release on President's determination, dated 09/13/09, available at http://blog.usw.org/2009/09/13/finally-a-president-with-the-guts-to-enforce-trade-laws/.