September 11, United States President, Barrak Obama, signed a bill adding a tariff on passenger and light truck tires imported from China to the states. According to the bill, the tariff will add 35 percent the first year, 30 percent the second year, and 25 percent the third year effect September 26, 2009. The tariff was initially proposed by The United Steelworkers (USW) union (who represents tire factory workers) stating tires imported from China caused a decrease in production from factories located in the United States. The decrease in production caused many plants to close in the U.S. causing the industry to cut more than 5000 jobs. In order to protect domestic jobs, the USW submitted a request the President asking for the U.S. government to add a 55% tariff to Chinese produced tires. This is the fourth time the USW has submitted such a request; the first three proposals were submitted to previous president George W. Bush (all rejected).
From TIA to tire manufacturers, several groups opposed the decision for a tariff because this would raise tire prices to end consumers. Some dealers in the U.S. already raised prices by 20% after hearing about the tariff and it is expected that more will follow suit. Also, China, in disagreement with the tariff, has already created its own tariffs on chicken and automotive parts counter-attacking the US tariff on tires.
With Kenda’s only passenger car radial tire plant located in China, this forces Kenda to find a creative solution in order to stay competitive in the USA. With plans to open new manufacturing capacity for PCR tires outside of China beginning in 2010 along with expanding our line with three brand new tires, Kenda looks to stay aggressive in the global marketplace. The new tires include the Kenda Vezda AST (KR26) which is Kenda’s first asymmetrical tire that offers great performance and handling without sacrificing comfort. The second new tire is the Kenda Icetec (KR27) which is the first Studless snow tire in Kenda’s lineup. With the new Stick-IE compound, square shoulder, and new siping and a directional pattern, the new winter tire is looking to tackle extreme snow/ice conditions! Lastly, Kenda Wild Trek A/T (KR 28) is Kenda’s first true A/T tire. The Wild Trek is designed to handle any off-road conditions while giving you great comfort and reliability on road. With these new tires coupled with a new and aggressive marketing plan in 2010, Kenda hopes to continue its growth in the Passenger Automotive market in the years to come.