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US tire tariff an isolated issue: expert

By Song Jingli (chinadaily.com.cn)
Updated: 2009-09-18 17:35

US president Barack Obama does not want to take a protectionist policy against China and the tire tariff will be an isolated issue, said Martin Walker, the senior director of Global Business Council at A.T. Kearney Inc, a global management consultant firm, in an interview with chinadaily.com.cn yesterday.

Obama signed an order last Friday to enact a three-year tariff that would take effect on Sept 26.

This decision would impose a 35-percent duty on Chinese tire exports in the first year, dropping to 30 percent in the second year and 25 percent in the third year.

Obama's decision has incurred great opposition from the Chinese government and Chinese tire companies. Many experts worried that his decision may be contagious, leading to tariffs on other types of goods, like textiles.

"Obama's decision is entirely legal, but it's foolish," Walker told chinadaily.com.cn.

"It's not the economic logic; it's politics," he said.

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"China's tire exports declined last year and the US tire industry did not ask for the tariff, the Steelworkers Union asked for that. The Democratic Senators of Michigan, of Ohio…asked for that," Walker, who is also a United Press International columnist, explained further.

He added that Obama wanted the climate change bill to be passed and wanted the support of some states like Michigan and Ohio, which have not yet made their decisions.

When asked to provide some suggestions from a consulting firm's perspective on how the Chinese rubber industry can better deal with difficulties posed by the tarrif hike, Walker said the industry had done pretty well in the past, but should turn to the Chinese domestic market.

"They should know that the US credit-fueled consumption era is over, and the market is back home," he said, adding that China's auto sales had climbed for months this year.