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Protectionism would cause more trade disputes and drag the U.S. economy into peril, a U.S. industry association warned Monday following President Barack Obama' s Friday decision to impose punitive tariffs on tires imported from China.
"With the U.S. economy on the verge of recovery, we strongly urge our leadership to follow through on G8 commitments to not erect protectionist barriers that would open the door for larger trade frictions and, more importantly, put our economic recovery in peril," American Apparel & Footwear Association (AAFA) President and CEO Kevin M. Burke said in a statement released Monday.
The AAFA is the U.S. national trade association representing apparel, footwear and other sewn products companies and their suppliers, which compete in the global market.
Burke said: "Although we expected the Obama administration to pursue tough enforcement of current trade laws, placing tariffs on imported tires from China will likely lead to inquiries about other imported goods, including textile and apparel products."
He said it should be politically difficult for any group to seek new tariffs that would drive up prices for families already facing tough economic times and there was no evidence to support a need for tariffs on clothing.
"However, we are concerned the affirmative decision on tires raises political expectations that additional protectionist measures on these and other products could be easily granted which could result in an international trade war and jeopardize our economic recovery," he said.
He said the United States should set a good example. "By limiting how we apply the safeguard measures that were put into place upon China's accession to the World Trade Organization, we will signal to our international trading partners that the United States remains open for business."
The tire case was originally brought up by the United Steelworkers Union in April. Notably, the tire industry didn't join the case, a tacit recognition that it has long ago left the U.S. market for the low-end tires at issue.
The powerful union, which represents workers at major U.S. tire manufacturers, filed a petition against China in April for import relief and won a favorable ruling from the U. S. International Trade Commission (ITC).
The panel recommended Obama impose a 55 percent tariff on Chinese tire imports which would be reduced to 45 percent in the second year and 35 percent in the third before being removed.
Obama has come under fierce pressure to introduce punitive tariffs on tire imports, amid warnings that a surge in the Chinese-made goods had cost more than 5,000 jobs in the United States.
The new tariffs, on top of an existing 4 percent tariff on all tire imports, will take effect from Sept. 26. The tariffs will soar by 35 percent in the first year, 30 percent in the second and 25 percent in the third year.
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