Chinese Tires

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By: Joe Kafchinski

In September 2009, President Obama announced a new tariff on U.S. imports of tires from China. According to the Federal Register, there will be a 35% tariff rate on imports from China under HTS categories 4011.10.10, 4011.10.50, 4011.20.10, and 4011.20.50 that began on September 26, 2009.

The Census Bureau is not involved in formulating trade policy of this type (although we collect and publish statistics that inform policy decisions). But we do have a ton of data available if you are interested in analyzing the policy and its potential impacts.

For example:

  • From 2005 – 2008, imports of tires (in the HTS categories mentioned above) from China almost doubled, from 26.4 million tires (worth $1.0 billion) in 2005 to 49.9 million (worth $2.0 billion) in 2008 – an 89% increase.
  • Imports from the rest of the world rose just 11% during the same time frame.

The average import value for a tire in 2008**:

  • From all countries, $53.37
  • From China, $39.59

So, a 35% increase in the price from China would bring those prices right in line with the world average ($53.44). Hmmm.

But! China was bringing down that $53 price with their own $39 price. The average price from the rest of the world, excluding China: $60.63.

Aside: This is just an average for the total imports now subject to the tariffs: under some individual tire codes, imports from China are almost 95% less expensive. In other categories, Chinese tires are actually more expensive. And even as detailed as HTS codes might seem, there can be significant differences between two products that fall under the same code.

China has responded to the tariffs by threatening to impose their own import restrictions on auto parts and chicken from the U.S. The New York Times brought specific attention to the Chinese demand for “king-size” American chicken feet. You might be surprised at just how big that demand is: U.S. exports to China of frozen chicken feet have grown by over 550% since 2005! In 2008, the U.S. exported 421 million kg of chicken feet to China, with a value over $280 million.

Obviously this is a pretty superficial analysis. But you can do a time series analysis, compare China data to other countries’ data, or compare the growth in other commodities using the data on our website or USA Trade Online.

 

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