Sanctions against Chinese tire imports may disrupt supply chain
December 15, 2010
The World Trade Organization ruled this week that the United States acted within its rights when it raised import taxes on Chinese tires by as much as 35 percent. Not all supply chain experts here approve.
Chief among those who voiced objections to the WTO ruling is Rosemary Coates, president of Blue Silk Consulting and author of 42 Rules for Sourcing and Manufacturing in China.
“Applying sanctions on tires to give the appearance of protecting U.S. consumer safety or protecting jobs is a false approach,” she told LM in an interview. “Most tire manufacturing (a very dirty industry) is already in China including the preponderance of manufacturing for Goodyear and Cooper Tire.”
She also pointed out that both Goodyear and Cooper are against the trade sanctions.
“So applying an import tariff in the U.S. hurts these U.S. companies as well as forces consumers to pay more…a double whammy.”
Coates added that U.S. consumers have come to expect downward pressure on prices and are not willing to pay more for US-made goods of equal quality. Hiding the real issue under the umbrella of safety is another false approach, she said.
“The Chinese manufacturers are making tires to specs determined by engineers in the U.S. and Europe. If the same specs were followed in a U.S. manufacturing plant, the results would most likely be the same,” said Coates. “The safety theme is a decoy issue to raise the emotional value of the discussion.”
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