U.S. Manufacturers Upset Over Chinese Tires

Lawmakers representing thousands of workers said that Chinese-made imports have been sharply undersold here, threatening domestic manufacturers of off-road tires.

WASHINGTON (AP) -- Lawmakers representing thousands of workers at tire manufacturing plants in Illinois and Iowa said that Chinese-made imports have been sharply undersold here, threatening domestic manufacturers of off-the-road tires.

"I don't know how much more we can take," Rep. Don Manzullo, R-Ill., said Tuesday of Midwest communities such as Freeport, Ill., with its Titan Tire Corp. plant. "We continue to lose one industry after another after another."

Lawmakers, organized labor and corporate executives told the U.S. International Trade Commission that the Chinese government's actions result in Chinese tires underselling U.S. products by as much as 50 percent.

They want the commission to recommend that President Bush provide relief, possibly by imposing duties or import quotas on the Chinese.

"American producers are facing a double hit as Chinese companies are dramatically increasing exports to the U.S. while benefiting from both government subsidies and dumped products significantly below production costs," said Rep. Leonard Boswell, D-Iowa.

Dumping is defined as a foreign producer selling a product in the United States at a price below that producer's sales price in their own home market, or at a price that is lower than the cost of production.

Executives for the American tire companies say the Chinese dumping comes at a particularly bad time because the U.S. agriculture sector has boomed in recent years and the demand for specialty tires has gone up significantly.

Among the facilities affected are the Titan plant in Freeport, as well as Bridgestone Firestone North American Tire plants in Bloomington, Ill., and Des Moines, Iowa. In Illinois alone, the companies have about 3,700 employees.

Those opposing a tough stance with China were scheduled to testify Wednesday before the commission -- a nonpartisan, independent federal agency -- which was not expected to reach any conclusions for Bush to consider before August.

The Commerce Department in February imposed duties on Chinese-made, off-the-road tires -- the kind commonly used in agriculture and mining -- after its own preliminary finding that China subsidized the illegal dumping of tires.

The monthly average of Chinese tire imports has declined in the months since, along with an increase in U.S. production and employment in the specialty tire industry, according to testimony before the commission.

"We're seeing things start to turn around. Customers we had not heard from in a while are calling and placing orders," said Maurice M. Taylor Jr., chairman and chief executive of Titan International Inc., the parent of Titan Tire. "In the first quarter of 2008, our corporate-wide net margins were about 3 percent, compared to the net loss we suffered in 2007."

But Kenneth Allen, vice president of Firestone Agricultural Tire, a division of Bridgestone Firestone, said if the relief period is short-lived the company will have to consider outsourcing because it can not make tires for a price that would compete with those previously offered by the Chinese.

"The Chinese producers penetrated our market by targeting the highest volume tires that were our bread and butter," he said. "They did not penetrate the market by offering new and better tire designs. Instead, they offered comparable tires that undersold our tires by 30 (percent) to 50 percent."

Critics of the Chinese say imports of tires from China increased to 3.2 million from 1.8 million tires between 2004 and 2007, with the value jumping to $324 million from $114 million.

Sen. Dick Durbin, the leader of Illinois' congressional delegation and the Senate's second-ranking Democrat, said he supported efforts to "restore balance" to the tire trade.

"I believe that American companies and their workers can compete with anyone if granted a level playing field," he said.

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