USTR Seeks Comments on Proposed Section 421 Additional Duty on Certain Tires from China, Etc.

All comments are due by July 27, 2009. USTR also invites interested parties to participate in a public hearing on August 7, 2009, if such a hearing is requested.

(In June 2009, the ITC proposed remedies to address its recent Section 421 determination that certain passenger vehicle and light truck tires² from China are being imported into the U.S. in such increased quantities or under such conditions as to cause market disruption to the domestic producers of like or directly competitive products.)

USTR Seeks Comments on ITC Proposed Remedy of 35-55% Additional Duty, Etc.

USTR invites domestic producers, importers, exporters, and other interested parties to submit their views and evidence on the appropriateness of the ITC's proposed restrictions and whether they would be in the public interest.

Specifically, the ITC proposed an additional ad valorem duty lasting for three years that would be 55% in the first year, 45% in the second year, and 35% in the third year. The ITC also suggested expedited consideration of Trade Adjustment Assistance for firms and/or workers that are affected by subject imports.

USTR Seeks Comments on Other Remedies Such as Different Duty, TRQ, Etc.

In addition, USTR invites comments on other possible actions, including:

imposing an additional duty on imports of Chinese tires at a rate, and/or for a period, different from the ITC recommendation;

imposing a tariff-rate quota on imports of Chinese tires;

imposing a quota on imports of Chinese tires;

an import monitoring mechanism; or

no import relief, pursuant to a determination by the President regarding the national economic interest or national security. (See below.)

Effect on industry, consumers, etc. In commenting on other possible actions, parties are requested to address the appropriateness of any other proposed action and how it would be in the public interest and address the:

short- and long-term effects that the proposed action is likely to have on the domestic passenger vehicle and light truck tires industry, other domestic industries, and downstream consumers, and

short- and long-term effects that not taking the proposed action is likely to have on the domestic passenger vehicle and light truck tires industry, its workers, and on other domestic industries or communities.

USTR to Make Its Recommendation to President

Following an affirmative Section 421 determination by the ITC, USTR is required to make a recommendation to the President concerning what action, if any, the President should take to remedy the market disruption.

President Must Provide Relief Unless Determines It's Not in National Interest

Within 15 days after receiving USTR's recommendation, the President is required to provide import relief unless the President determines that providing such relief is not in the national economic interest of the U.S. or, in extraordinary cases, that taking action would cause serious harm to the national security of the U.S.

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.

¹Section 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.

²For purposes of its investigation, the ITC considered certain passenger vehicle and light truck tires to consist of new pneumatic tires, of rubber, from China, of a kind used on motor cars (except racing cars) and on-the-highway light trucks, vans, and sport utility vehicles, provided for in Harmonized Tariff Schedule (HTS) Subheadings 4011.10.10, 4011.10.50, 4011.20.10, and 4011.20.50.

(See ITT's Online Archives or 07/14/09 news, 09071499 4, for BP summary of China stating it would oppose the ITC's proposed action.

See ITT's Online Archives or 07/02/09 news, 09070230, for BP summary of the U.S. requesting consultations with China on this issue.

See ITT's Online Archives or 07/01/09 news, 09070120, for BP summary of ITC's remedy proposals.

See ITT's Online Archives or 06/19/09 news, 09061940, for BP summary of the ITC's Section 421 determination.)

- comments due July 27, 2009

-hearing, if requested, on August 7, 2009

USTR notice (FR Pub 07/15/09) available at http://edocket.access.gpo.gov/2009/pdf/E9-16824.pdf