Forbes.com: Obama Faces Tire Trade Dispute
Washington, D.C., partner Elliot Feldman, leader of Baker Hostetler's international trade practice, was quoted in a September 2, 2009, Forbes.com article, "Obama Faces Tire Trade Dispute."
According to the article, the decision about whether to restrict tires imported from China is now in the hands of President Obama. At issue is whether the Chinese-made, low-end tires sold in the U.S. are flooding the market in a way that "disrupts" domestic production, according to the article. On one side of the debate is the United Steelworkers union, which formally complained in April that 5,000 jobs have been lost since 2004 as a result of the imports. Opposing them is a coalition of Chinese tire, rubber and metal manufacturers, commerce officials, free trade advocates and U.S. distributors who rely on cheap goods from China to keep costs down.
According to the article, the U.S. mechanism for dealing with such filings is to refer them first to the International Trade Commission (ITC), a U.S. agency that advises the president and Congress on such matters. In June the ITC's divided panel recommended imposing sliding tariffs on tires from China that would start at 55% the first year. The imposition would drop to 45% for the second year out and 35% for the third. Currently, imports like these face a 4% tax.
The president faces a conundrum, according to Feldman. During his tenure George W. Bush rejected four cases like this, but Obama, who got critical support from labor in his 2008 campaign, has signaled a break with his predecessor. In July, 10 U.S. senators asked the president to accept the ITC's tariff recommendation. If Obama needs those senators' votes later this year, say, to pass his health care reform package, he might be willing to acquiesce to their wishes now.
Click to read the full article on Forbes.com.