The United Steelworkers, qualifying as an “entity” “representative of an industry” under Section 201 of the U.S. Trade Act of 1974, petitioned the Obama Administration in April 2009 to enact a temporary “safeguard” remedy to protect the manufacture and sale of low-grade commercial tires in the United States against a surge of imports from China. Petition Seeking Relief from Market Disruption Caused by Imports of Consumer Tires from China, Inv. No. TA-421-07, April 20, 2009.  Even though the union filed the petition without cooperation or support from any company manufacturing tires in the U.S., and safeguards exist primarily to protect productive industries, the Obama Administration is under exceptional political pressure to honor the union’s request. 

The special safeguard law for China, Section 421, expires in 2012 in accordance with China’s Protocol of Accession to the World Trade Organization.  Thereafter, China will be subject only to the same safeguard provisions as every other country. Until then, the Obama Administration will have to weigh its relations with China against domestic interests and priorities. All safeguards, uniquely among trade remedies, require presidential decisions.

The United States International Trade Commission (“ITC”) issued a report on June 18 finding “market disruption,” the statutory basis for recommending trade relief for a domestic industry under the special safeguard for China. The ITC recommended, on July 9, three years of very high but gradually reducing tariffs. Ten United States Senators then wrote President Obama endorsing the ITC recommendations.

Relying on the ITC record, a Trade Policy Staff Committee (“TPSC”) assembled for this case and comprised of the Departments of State, Commerce, Labor, and Treasury, chaired by the Office of the United States Trade Representative (“USTR”), must make its own recommendation to the President as to whether he should grant any relief to the industry and, were he to do so, how much and in what form. The final public hearing on the case, convened by the TPSC, was held in Washington, D.C. on August 7. All written submissions were due from all parties by August 11.

The statute provides expressly for settlement of disputes where market disruption has been found, but should China want to settle this dispute, it must do so by August 17. The TPSC is expected to make its recommendation to the President by September 2. In the absence of a settlement, the President must decide the question of remedy for the market disruption found by the ITC by September 17.

China’s strategy in this case has been to adopt a “Republican” political and policy position – that the market forces surrounding the choices of the companies to give up the manufacture of low-grade tires should govern, allowing thousands of jobs to move offshore to lower cost manufacturers. China’s opposition to safeguard remedies has been articulated as a preference for market forces over the employment of American workers, and for economic analysis that contradicts the ITC’s report. Advocates for the Chinese side have given the law little attention.

The Chinese strategy opposing the imposition of safeguard remedies neglects both the politics of the American two-party system, and the legal purpose of safeguard provisions. Its reliance on dueling economic analyses, instead of law and a keener appreciation of the political situation of the President, probably will mean that the special safeguard for China will be applied for the first time. China may have something still to say, however, about the severity of the application.

The President is not likely to provide the full measure of relief proposed by the ITC because he may not want to gamble on the predictions that the tariffs would be prohibitive and cause even more market disruption, but he may be inclined to provide more “relief” than China would find acceptable. The August 17 deadline is not absolute (the statutory language instructing that the Trade Representative “should seek to conclude such agreement before the expiration of the 60-days consultation period” would seem equivocal enough were China to express immediately a commitment to a politically sensitive settlement). The statute also permits later review, on the President’s initiative, for modification, reduction, or termination of imposed relief. Mutual sensitivity to the domestic political implications of this case in both China and the United States could lead to an amicable compromise, albeit probably somewhat unsatisfactory (as compromises and settlements are supposed to be) for everyone. 

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美国国际贸易委员会(United States International Trade Commission)于6月18日发表了一份报告,宣布“市场受影响”(market disruption),这是建议对中国轮胎采取特保措施的法律基础。7月9日,美国国际贸易委员会建议在未来三年内征收高额但逐年递减的关税。十位美国参议员致信奥巴马总统支持美国国际贸易委员会的建议。


以美国国际贸易委员会报告为基础,一个由美国贸易代表办公室牵头、美国国务院、商务部、劳工部和财政部组成的贸易政策委员会(Trade Policy Staff Committee, TPSC)将就是否批准这一特保措施向总统提出建议。如果应采取特保措施,那么将采取哪一措施、具体标准如何。8月7日,该委员会就本案在华盛顿召开了公开听证会,关切此案的各方也在8月11日前向该委员会递交了书面意见。