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U.S. Decision on China Tire Exports Could Impact Sporting Goods Exports To China

Date: 9/23/09

SILVER SPRING, MD – September 23, 2009 -- In response to President Obama’s decision to impose 25-35% safeguard duties on Chinese-made tires, China’s Ministry of Commerce announced that it would be initiating antidumping investigations against U.S. exports.  China identified chickens and auto parts as the first two targets of its antidumping investigations, but will consider other products going forward. 

According to Chinese authorities, the U.S. decision represents “a grave act of protectionism” that “sends the wrong signal to the world” at a time of economic crisis.  Another element of the fall-out from the Obama Administration’s decision is likely to be increased filings by other U.S. industries under Section 421 and other U.S. trade statutes in the coming months.

“U.S. trade relations with China are likely to be able to withstand these developments at the bilateral level,” said Bill Sells, SGMA vice president of government relations.  “However, there will be significant repercussions internationally which could impact the sporting goods and fitness industries.”

The primary concern for SGMA is that the White House decision goes against the earlier G-20 pledge to avoid protectionism during this period of economic and financial turmoil. This new policy could sour the atmosphere at the September 24-25 G-20 summit in Pittsburgh and undercut the prospects for securing significant progress there on the Doha Round WTO negotiations which are critical to SGMA members’ overseas market access objectives. 

Another problem for SGMA is that this precedent-setting U.S. decision to grant relief in a China-specific safeguard case could embolden other trading partners to do the same.  By making clear the intensity of its concerns about trading partners’ usage of the China-specific safeguard mechanism, China had been successful to date in warding off affirmative decisions in such cases around the world with near perfect success outside the textile sector.  This adverse decision by the United States now puts a major breach in that wall of defense, and the prospects for other countries taking similar actions in other product areas now has increased significantly.

The Sporting Goods Manufacturers Association (SGMA), the #1 source for sport and fitness research, is the leading global trade association of manufacturers, retailers, and marketers in the sports products industry.  SGMA helps lead the sports and fitness industries by fostering participation through research, thought leadership, product promotion, and public policy.  More information about SGMA membership and SGMA's National Health Through Fitness Day can be found at www.SGMA.com.

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