ITC Finds "Safeguard" Injury Against Tires from China (1st Section 421 Decision for Obama Presidency)
The U.S. International Trade Commission has announced an affirmative determination in its Section 421 China safeguard investigation involving certain passenger vehicle and light truck tires.
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The Commission found, in a 3-2 vote, that certain consumer tires (used on passenger cars, light trucks, minivans and sport utility vehicles) from China are being imported into the U.S. 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.
As a result of the affirmative determination, the Commission will consider the issue of remedy. It will send its report, including its remedy proposal, to the President and the U.S. Trade Representative by July 9, 2009. The President will make the final decision concerning whether to provide relief to the industry and the type and duration of any such relief.
No Section 421 Import Relief Has Been Implemented to Date
Under President Bush, four Section 421 investigations on Chinese products occurred (pedestal actuators, steel wire garment hangers, steel pipe fittings, and circular welded non-alloy steel pipe), and recommendations were made for remedy; however, President Bush decided to take no action.
The Section 421 case on tires will be the first to be decided by another President.
Union Petitioners Have Asked for Import Quota
The United Steelworkers is the petitioner for this Section 421 import relief, and is asking that an annual import quota be set at 21 million tires, which would increase by five percent in the second and third years.
Section 421 Investigations Address Import Surges from China
Section 421 investigations are a transitional safeguard tool to address import surges of Chinese products that cause or threaten market disruption. The procedure was negotiated as part of China's accession to the World Trade Organization, and is in effect until December 11, 2013.
In such investigations, the ITC determines if market disruption exists. If it finds disruption, the ITC issues a report containing its recommendations to prevent or remedy the disruption, including the amount of increase in, or imposition of, any duty or other import restriction.
After receiving the ITC's report, the USTR is required to provide a recommendation to the President on what provisional measures, if any, to take. The President is subsequently required to provide import relief within 15 days after receiving the USTR's recommendations, unless the President determines that provision of such relief is "not in the national economic interest of the U.S." or "would cause serious harm to the national security of the U.S."
(Note that the Section 421 safeguard can be used to provide relief against any type of imports from China, including textiles and apparel.
See ITT's Online Archives or 04/21/09 news, 09042115, for BP summary of filing of Section 421 petition by USW. See ITT's Online Archives or 06/01/07 news, 07060120, for BP summary of WTO Safeguard procedures available for use against China.
See ITT's Online Archives or 01/29/03, 04/29/03, 03/05/04, or 01/04/06 news, 03012930, 03042930, 04030540, and 06010430, for BP summaries of President Bush's previous determinations not to provide Section 421 relief to the U.S. pedestal actuator, steel wire garment hanger, steel pipe fitting, and circular welded non-alloy steel pipe industries, with links to explanatory summaries of the Section 421 market disruption investigations.)
ITC press release (dated 06/18/09) available at http://www.usitc.gov/ext_relations/news_release/2009/er0618gg1.htm