June 29, 2009
News Release 09-048
Inv. No. TA-421-007 (Remedy)
Contact: Peg O'Laughlin, 202-205-1819

The U.S. International Trade Commission (USITC) today announced the remedy proposals it will forward to the President and the U.S. Trade Representative (USTR) in its China safeguard investigation concerning certain passenger and light truck tires from China.

Today's action follows the Commission's June 18, 2009, determination on market disruption in the investigation. Chairman Shara L. Aranoff and Commissioners Charlotte R. Lane, Irving A. Williamson, and Dean A. Pinkert voted in the affirmative, finding that certain passenger vehicle and light truck tires from China are being imported into the United States in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products. Vice Chairman Deanna Tanner Okun and Commissioner Daniel R. Pearson voted in the negative.

Chairman Shara L. Aranoff and Commissioners Charlotte R. Lane, Irving A. Williamson, and Dean A. Pinkert announced that they will propose that the President, for a three-year period, impose a duty, in addition to the current rate of duty, on imports of certain passenger vehicle and light truck tires from China. This duty would be 55 percent ad valorem in the first year, 45 percent ad valorem in the second year, and 35 percent ad valorem in the third year. They further announced that they will recommend that, if applications are filed, the President direct the U.S. Department of Labor and the U.S. Department of Commerce to provide expedited consideration of Trade Adjustment Assistance for firms and/or workers that are affected by subject imports.

Vice Chairman Daniel R. Pearson and Commissioner Deanna Tanner Okun announced that while they did not find market disruption to exist, they intend to submit views on this matter to the President, as has been done previously under Section 421 investigations. They will urge that no trade restricting action be taken. Rather, they will urge that the U.S. government be prepared to provide economic adjustment assistance to displaced tire workers. They noted that Trade Adjustment Assistance already has been provided to some tire industry workers and will recommend that the President utilize similar measures to help workers who find that their employment alternatives are changing.

The Commission will submit its report to the President and the USTR by July 9, 2009. The report will include the Commissioners' determination, views, and remedy proposals. The President, not the Commission, will make the final decision whether to provide relief to the U.S. industry and the type and amount of relief.

The Commission's public report to the President, Certain Passenger Vehicle and Light Truck Tires from China (Inv. No. TA-421-007, USITC Publication 4085, July 2009), will contain the views of the Commissioners and information developed during the investigation. A copy may be requested after July 30, 2009, by emailing pubrequest@usitc.gov, calling 202-205-2000, or writing to the Office of the Secretary, 500 E Street SW, Washington, DC 20436. Requests may also be faxed to 202-205- 2104.

In accordance with Section 421 of the Trade Act of 1974, we have determined that imports of certain passenger vehicle and light truck tires from China are being imported into the United States in such increased quantities that they are causing market disruption to the domestic industry producing such tires. Under Section 421(f) of the Act, we have the responsibility of recommending actions that will remedy the market disruption. We have considered the relevant factors set out in the statute, the written and oral submissions of all parties, and other information obtained in the investigation.

To remedy the market disruption caused by rapidly increasing subject imports, we propose that the President, for a three-year period, impose a duty, in addition to the current rate of duty, on imports of certain passenger vehicle and light truck tires from China. This duty would be 55 percent ad valorem in the first year, 45 percent ad valorem in the second year, and 35 percent ad valorem in the third year. In our opinion, these tariff levels would remedy the market disruption that we have found to exist.

Finally, we note that as a result of recent amendments to the trade adjustment assistance provisions administered by the United States Department of Labor, groups of workers who are covered by a petition for such assistance and whose firms are part of the domestic industry that is the subject of our affirmative determination of market disruption shall be certified as eligible to apply for trade adjustment assistance. If applications are filed, we recommend that the President direct the United States Department of Labor and the United States Department of Commerce to provide expedited consideration of trade adjustment assistance for workers and/or firms that are affected by subject imports.

I make the following statement regarding remedy on behalf of myself and Commissioner Dan Pearson.

Section 421(f) instructs the Commission to propose the amount of increase in or imposition of any duty or other import restrictions necessary to prevent or remedy market disruption. The same section also states, and I quote: "Members of the Commission who did not agree to the affirmative determination may submit in the report" to the President and the U.S. Trade Representative "separate views regarding what action, if any, should be taken to prevent or remedy market disruption."

While we did not find market disruption to exist, we intend to submit views on this matter, as has been done previously under Section 421 investigations.

Briefly, our views on remedy will urge that no trade-restricting action be taken. It is our view that whereas subject imports have not been a significant cause of market disruption, any trade-restricting remedy will not benefit the domestic tire industry, its workers, the broader U.S. economy and society as a whole. This is an industry in which the trend toward gradual downsizing appears likely to continue regardless of the Commission's action today. Thus, we urge the U.S. government to be prepared to provide economic adjustment assistance to displaced tire workers. We note that Trade Adjustment Assistance already has been provided to some tire industry workers and recommend that the President utilize similar measures to help workers who find that their employment alternatives are changing. Implementing a trade restriction would be far more likely to cause market disruption than to alleviate it.

Thank you, Madame Chairman.