Officials with the United Steelworkers union have filed official grievances with the Obama administration, urging the president to enact tariff barriers against future imports of Chinese-made tires. The union is merely asking that the administration cap imports of Chinese tires at their 2005 level of 21 million annual units – less than half of the 2008 total of 46 million units valued at $1.7 billion.Leo Gerard, president of the United Steelworkers union, believes that the upsurge in Chinese imports is directly responsible for the slowdown at American factories – particularly industry icons like Goodyear Tire & Rubber.
The United Steelworkers union represents 15,000 tire workers at 13 plants nationwide.
It is a well-documented fact that China employs extensive government subsidies, currency manipulations, and import quotas on goods originating in the United States. The U.S. on the other hand employs virtually none in its own defense, and during the previous administration every opportunity to enact a restriction was ignored by the White House.
President Obama’s recent track record on international commercial dealings leaves little hope for the grievances of the Steelworkers union, or any other American industrial group for that matter. The President has already backed off his pro-renegotiation stance on NAFTA, and at the G20 summit on April 2 he joined in the declaration that “protectionism” must be avoided. His stance on this issue will be a key indicator of his approach for the rest of this term in office; unfortunately the outlook is not good.The fact is that the United States consumer market for almost all goods is shrinking due to the prolonged economic downturn, but at the same time the market-share for Chinese products is increasing. The tire industry is just one of many which is being victimized by Chinese trade aggression and the recession.
What the United Steelworkers union is asking for is that the government-sponsored corporations in China be the ones who suffer the burden from this market instead of American companies and American workers. The proposed quota program being called for would expire after just 3 years and would have incremental increases of 5 percent annually, allowing more Chinese tires to come in each following year.In hindsight the union is not really asking for much. Unfortunately, they are probably better off expecting nothing in return. After receiving the petition the U.S. International Trade Commission will have 60 days to investigate the claim and make a recommendation to the president. An approval of the quota would likely foster a flood of new petitions from other industries around the country. Disapproval would simply fall in line with the previous “free trade” agenda of the past three decades.
Instead of focusing so much on being conciliatory in international cooperation, the White House needs to take a firm stance in support of American industries. We talk about helping and encouraging global development, but if that development comes at the loss of America’s hard-earned prosperity then no one is really better off.