Monday, September 5, 2011

Tire Tariff that Drew Schwab's Ire is Upheld by WTO

Posted By on Mon, Sep 5, 2011 at 11:32 PM

A steep tariff on imported tires from China that was opposed by local tire retailing giant Les Schwab has survived a challenge at the World Trado Organization. The WTO announced on Monday that it would uphold the tax on imported Chinese tires that President Obama implemented over Beijing’s objections in 2009. The tariff increased tire taxes by  35 percent in the first year and has raised them again in each subsequent year.

According to labor groups, the higher tariffs have stemmed the tide of cheap Chinese tires into the United States allowing domestic manufacturers to regain a larger share fo the market and add jobs. In fact, US imports of Chinese Tires fell by almost 24 percent last year.

However, that means higher costs for tire retailers like Les Schwab which imports a significant amount of its inventory from China. The company has declined in the past to say how much of its stock originates in China. However, it said that the higher tariffs would result in higher costs for its customers. The tire manufacturer won the support of Oregon’s congressional delegation, including Senators Merkley and Wyden who lobbied against the tire tax.


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