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quote:By Tom S.
Buried on page four of the Wall Street Journal today is an article stating the U.S. won a decision from the World Trade Organization on tires made in China. In summation, the U.S. now has the ability to add up to 30% in tariffs on tires imported from China. As a side note, Goodyear was one of the largest companies opposing this decision.
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This is actually the second stage of a three year plan implemented by our country's new administration and instigated by the United Steel Workers Union. The first stage was a 35% tariff implemented last year, the second stage is 30% for this year, and the third stage is an additional 25% for next year.
This plan has already caused many problems for tire dealers and consumers alike. Before the tariff was implemented there were many companies producing entry level and mid range tires in China. Many of these companies imediately stopped production and pulled their molds to go to other countries, unfortunately not the United States. When production of these tires stopped it didn't take long for supplies to run low in the US. This shortage of low end and mid range tires forced consumers to buy more of the high end tires which has now created a shortage on the high side.
Another thing to add to the mess is the fact that natural rubber prices have shot up over the last year and there is a shortage of around 300,000 tons of it.
What all of this means to you and I is, higher prices and poor availability for quite a long while.
On Edit - I would like to clarify the time frame a bit. What I posted above is a little confusing.
Phase I - 2010
Phase II - 2011
Phase III - 2012