Oregon Public Broadcasting

An American trade panel decided Thursday that low-cost tires from China were unfairly flooding the U.S. market.

The U.S. International Trade Commission’s ruling is expected to help big name American tire makers, like Michelin or Goodyear.

That could hurt the sales of non-name brand tires from China and Mexico.

Central Oregon correspondent Ethan Lindsey reports that the decision is  bad news for Bend-based Les Schwab Tire Centers.

As you drive into a Les Schwab tire store, you see the workers running from the office to the garage – just as they do in the famous commercials.

You also see aisles of gleaming silver rims, and bright black rubber tires.

But most of those tires aren’t the famous American brands like Goodyear.

Instead, they are off-brand labels – like the Wanli S101-5 – made in China.

Les Schwab sells $1.6 billion worth of tires every year.

The U.S. International Trade Commission says Les Schwab, and other stores, are getting the tires at an unfair discount from China.

In it’s 4-to-2 ruling, the trade panel says quotas or price restrictions should be put on tires imported from China.

Les Schwab had tried to convince the panel otherwise – it said most of those sales come from the lesser-known brands.

In a written statement, Les Schwab CEO Dick Borgam said the ruling means “Americans will face increased costs for tire and auto maintenance, at a time when most families are struggling to make ends meet.”  

The company also says higher prices could result in job losses for tire sales maintenance workers.

Gary Hubbard is the policy director for the United Steelworkers, who also represent American tire and rubber workers.  They support the quotas

Hubbard says the problem is the prices are kept artificially low by Chinese trade practices. And that has already cost 5000 American jobs in tire manufacturing.

Gary Hubbard: “Certainly, Les Schwab wants to make its case that consumers want cheap, low-priced tires. But what happens is that once China grabs a third or more of the market, then they jack the price up, and then nobody can do anything about it – including consumers.”

By July, the Trade Commission will decide what price controls or quotas to put on Chinese tires – and President Obama would have to then sign off on the changes by the fall.