U.S. and China Trade Spat Over Tariffs on Tires
CHETRY: Welcome back to the "Most News in the Morning." Twenty- two minutes past the hour now. We have Stephanie Elam "Minding Your Business" this morning in for Christine.</s>STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Good morning.</s>CHETRY: And we're talking about -- good morning. Good to see you -- this little spat between the U.S. and China over importing tires.</s>ELAM: Yes, and you may have missed that this was happening because on Friday everyone was caught up with the fact that we had this Lehman anniversary and the fact that it was 9/11. So you may not have heard about this on Friday, but, yes, that's true. The Obama administration imposing a tariff on tires coming in from China. And the whole idea here is making sure that trade would be fair between the two countries. Well, needless to say, labor is happy about this. China is not happy about this, and companies that import tires to the United States are not happy about this at all. So let's take a look at exactly what's happening here. The U.S. companies that import this are against this decision because they're saying, we're just going to have to pass this on to the consumer at a time that we're trying to get the consumer back on their feet here. This is not going to be something that's really helping out. So starting September 26th of this year, you're going to see tariffs for tires coming in, consumer tires for light trucks and cars coming in from China, going up to 35 percent. Then in 2010, that number will drop down to 30 percent. And then in 2011, that will drop back down to 25 percent. They're saying this is all because the U.S. tire market being thrown out of whack because so many cheap tires are coming in from China. If you take a look at it, tires coming from other countries cost more than $55 whereas coming from China, they cost less than $40. Of course, the fear here is that this is going to throw off the relationship as far as imports and exports between China and the U.S. China going ahead and saying, OK, this is what you're going to do. We're going to take a look at poultry (ph). Are you dumping that on our market and auto parts as well? So there's a whole fear here that this could lead to a bigger issue. But here's the thing, from 2004 to 2008, imports of tires rose 215 percent from China. Domestic production has fallen 25 percent. And one company says he doesn't even have another company to go to in the United States that makes tires because the production has cut down so much. So there's a big debate on whether or not this is really going to affect people here, or even bring jobs back to the United States. But, obviously, labor, very happy about the Obama administration making this call.</s>CHETRY: The hope is that this would be one of the first steps toward ramping up and helping the manufacturing sector here, right?</s>ELAM: That's a huge part. People are saying, too many jobs are being exported out of the country. We need to make things here in the United States and this is the first way to do that. Keep in mind, you've got the G-20 meeting in Pittsburgh, September 25th, or 24th and 25th, so people want to see how that's going to affect that conversation and the fact that Obama is going to Beijing in November as well.</s>ROBERTS: Stephanie Elam "Minding Your Business" this morning. Stephanie, thanks so much.</s>ELAM: Thanks.</s>ROBERTS: "Role Call" magazine is out with its annual list of Congress' 50th wealthiest people. How much are they worth? Well, let's put this way. A whole lot less than they were a year ago. Twenty-five minutes after the hour.