🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

REFILE-ANALYSIS-US could speed up decision in China tires

Published 08/14/2009, 07:18 PM

(Refiled to fix typo in top bullet point)

* Timing could be awkward before G20 summit

* Tire decision could affect other U.S. goods

By Doug Palmer

WASHINGTON, Aug 14 (Reuters) - U.S. President Barack Obama could be tempted by the political calendar to decide earlier than scheduled next month whether to restrict tire imports from China in a case seen as a test of his trade policy.

Obama is to announce his decision by Sept. 17, one week before he hosts Chinese President Hu Jintao and other world leaders for a G20 summit on global economic concerns.

A decision to restrict tire imports, and open the floodgates for other U.S. industries to seek relief against competition from China, could be awkward for Obama coming so shortly before that event.

If Obama is going to impose restrictions, the week of the Sept. 7 U.S. Labor Day holiday presents an opportunity for an announcement that would please labor groups.

Given those factors, "I wouldn't be at all surprised if a decision came early, particularly around Labor Day," said one participant in the case, who asked not be identified.

However, it's unclear whether the U.S. Trade Representative's office can finish its fact-gathering process quickly enough for Obama to make an early decision, the participant said.

Obama's decision has consequences beyond the tire sector because of concern that China, a major buyer of U.S. farm goods, could retaliate if curbs are imposed.

Obama's predecessor, George W. Bush, turned down four similar requests for relief and industry groups eventually stopped filing new cases while he was in office.

A spokeswoman for the U.S. Trade Representative's office said she had nothing to share when asked if the administration was speeding up its consideration of the matter.

G20 PLEDGE

G20 leaders pledged in April not to adopt measures to restrict trade through the end of 2010. But Obama also has promised tougher enforcement of U.S. trade laws than Bush.

Union workers say tire imports from China have more than tripled since 2004 and the United States is well within its rights under World Trade Organization rules to impose restrictions in response to the surge.

China agreed to let other countries use the anti-surge measure for 12 years when it joined the WTO in 2001.

The U.S. Steelworkers union filed a petition asking for import curbs and receive a favorable ruling from the U.S. International Trade Commission.

The panel recommended a 55 percent tariff that would decline to 45 percent tariff in the second year and 35 percent in the third before being removed.

Obama is free to follow that advice or come up with his own remedy. He also could deny relief as Bush did.

Administration officials appeared to be trying to find a middle ground when they held their own hearing last week with the Steelworkers union, Chinese tire manufacturers and U.S. tire importers and distributors.

The current Sept. 17 deadline is based on the assumption that the U.S. Trade Representative's office will deliver its recommendations to Obama on Sept 2.

Under the U.S. statute, Obama has to make a decision within 15 days of receiving USTR's report.

Nothing bars USTR from sending its recommendations early or Obama taking less than 15 days to make up his mind.

(Reporting by Doug Palmer; editing by Vicki Allen)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.