Federal laws/regulations; Background;

OLR Research Report

October 27, 2011




By: Rute Pinho, Associate Analyst

You asked whether there is a 35% federal tariff on new tires, and if so, when it was first imposed and the rationale for it.

There is a 25% tariff on certain Chinese tires, and it is scheduled to expire in September 2012. The rate was initially 35%, when President Obama imposed the three-year tariff in September 2009. The action was in response to a U.S. International Trade Commission (ITC) investigation that found that import surges from China were disrupting the domestic tire market. The new tariff took effect on September 26, 2009 and amounts to 35% the first year, 30% the second, and 25% the third. It applies only to certain passenger vehicle and light truck, van, and sport utility vehicle tires imported from China. The tariff is in addition to the 4% import duty generally imposed on tire imports.

The ITC launched its investigation in April 2009 in response to a United Steelworkers union complaint. The complaint and subsequent investigation were instituted under 2000 federal law that allows the ITC to investigate market disruptions caused by increased import competition from China and gives the President discretion to take actions to prevent or remedy the market disruptions (19 USC 2451). The ITC recommended higher tariffs for the three-year period than the president ultimately imposed – 55%, 45%, and 35%. Based on the ITC's recommendation, the president also directed the U.S. labor and commerce departments to expedite applications for trade adjustment assistance for affected workers and businesses.

The following Congressional Research Service Report describes the investigation and the president's actions in greater detail: http://assets.opencrs.com/rpts/R40844_20110131.pdf.