Tires That Just Can’t Catch a Break

Ok, so that’s a bad play on words, but radial tires are one of the most valuable GSP imports.  In 2010, GSP imports of tires for passenger cars, trucks, and buses exceeded $725 million, saving American importers $29 million.  Thailand and Indonesia are the two leading GSP suppliers of radial tires under GSP, combining for approximately $650 million worth of imports last year.

As you can see in the graph below, imports under GSP have been rising steadily since September 2009,  when the United States slapped 35% tariffs on tire imports from China.  GSP imports even continued to rise – albeit more slowly – after Thailand lost its GSP-eligibility on one of the two types of radial tires in July 2010!


Since GSP expired, radial tires now face tariffs of 4%.  How companies choose to deal with that price increase varies.  Tire Business published an article yesterday (possibly gated) on GSP expiration.  It quotes G.S. Sareen, the managing director of Omni United, which expects to sell more than 1 million tires this year imported from Indonesia:

“Omni United believes that this lapse could be temporary and has decided to absorb 50 percent of the extra tariff imposed, which has resulted in an increase of approximately 2 percent.”

Like many companies, Omni has decided to take a chance and not raise prices by the full tariff rate.  However, if Congress fails to renew GSP – or the renewal is not made retroactive – the Florida-based company will lose 2% of its profit on each of the million plus tires it expects to sell from Indonesia.  In addition to its Miami and Jacksonville operations, lost profits could affect facilities in Evergreen, Colorado, Traverse City and Kingsley, Michigan, and Lindstrom, Minnesota.

Even if Omni comes out of this alright, what about you?  Companies like Omni may be willing to foot some of the bill, but they’re not paying all of it.  The rest falls on customers like you (and me).

This entry was posted in Colorado, Company Stories, Florida, GSP Press, Indonesia, Michigan, Minnesota, Thailand. Bookmark the permalink.

One Response to Tires That Just Can’t Catch a Break

  1. Pingback: Tweets that mention Tires That Just Can’t Catch a Break | Renew GSP Today -- Topsy.com

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