WORLD TRADE  
ORGANIZATION  G/SG/N/16/USA/5/Suppl.1 
30 September 2009 
 (09-4581) 
Committee on Safeguards Original:   English 
  
 
NOTIFICATION RELATING TO THE TRANSITIONAL PRODUCT-SPECIFIC 
SAFEGUARD MEASURE PURSUANT TO SECTION 16 OF  
PART I OF THE PROTOCOL ON THE ACCESSION  
OF THE PEOPLE'S REPUBLIC OF CHINA 
 
Request for Consultations from the United States
 
 
(Passenger Vehicle and Light Truck Tyres ) 
 
Supplement  
 
  The following communication, dated 18 September 2009, is being circulated at the request of the Delegation of the United States.    
_______________ 
 
 
1. Evidence of market disruption or threa t of market disruption by the competent 
authority  
  The United States International Trade Commi ssion (USITC) conducted an investigation 
pursuant to section 421 of the Trade Act of 1974, as amended (19 U.S.C. 2451) and determined that 
certain passenger vehicle and light truck tires of  Chinese origin were being imported into the 
United States in such increased quantities or under su ch conditions as to cause or threaten to cause 
market disruption to the domestic producers of like or directly competitive products.  The USITC's determination and analysis was tr ansmitted to the President on 9 July 2009.  The public version is 
contained in Certain Passenger Vehicle and Light Truck Ti res from the People's Republic of China , 
Investigation No. TA-421-7, USITC Publication No. 4085.     The USITC provided notice of the investigation, held a public hearing, and provided opportunities for interested persons to present evidence  and their views.  The USITC also provided an 
opportunity for response to the presentation of other parties.   
  The USITC found market disruption to exist.  It found, inter alia , that the quantity of subject 
imports of tires from China rose by 215.5 per cent between 2004 and 2008.  The USITC concluded that, whether viewed over the last one-, two-, or th ree-year period, the increase was large and rapid, 
and was continuing at the end of the period examined.  The USITC also found that the domestic tire 
industry is materially injured.  It found that almost all the industry indicators declined during the period examined (2004 – 2008), with capacity, produ ction, shipments, number of US production and 
related workers and hours worked, productivity, and fi nancial performance at the lowest level in 2008.  
It also noted that four plants were closed duri ng that period, with plans announced to close an 
additional three plants during 2009.  The USITC found the rapidly increasing imports to be a 
significant cause of the material injury.  In perform ing its analysis, it considered the volume of subject 
imports, the effect of subject imports on the domestic  industry, and the effect of subject imports on G/SG/N/16/USA/5/Suppl.1 
Page 2  
 
  prices.  It found a direct and significant connecti on between the rapidly increasing imports of subject 
tires from China and the domestic industry's dete riorating financial performance and declining 
capacity, production, shipments, and employment.  Among other factors, it cited the sharp upward 
changes in US market share of the subject imports and a corresponding declining share for domestically produced tires.  It also cited pr icing data showing significant and continuous 
underselling by the subject imports.  In addition, the USITC found that the substantial reduction in 
domestic capacity and the closures of US plants dur ing the period examined were largely in reaction 
to the significant and increasing volume of subject im ports from China.  In making its determination, 
the USITC took into account and addressed the princi pal arguments of the various parties to the 
investigation.   
 
 USITC Publication No. 4085 has been submitted electronically with this notification and can 
also be found on the USITC's website at http:// www.usitc.gov/publications/safeguards/pub4085.pdf.   
 
2. Information on whether there is an abso lute increase in imports or a relative increase 
 
 The USITC found that subject imports were in creasing rapidly in both absolute and relative 
terms.     In absolute terms, imports of the subject tires from China increased throughout the period of 
investigation and were the highest , in terms of both quantity and value, in 2008, at the end of the 
period examined.  In terms of quantity, the subj ect imports from China increased from 14.6 million 
tires in 2004 to 20.8 million in 2005, 27.0 million in 2006, 41.5 million in 2007, and 46.0 million 
in 2008.  In terms of value, they increased from $453.3 million in 2004 to $691.9 million in 2005, $931.7 million in 2006, $1.493 billion in 2007, and $1.788 billion in 2008.  The quantity of subject 
imports rose by 215.5 per cent between 2004 and 200 8, by 53.7 per cent between 2006 and 2007, and 
by 10.8 per cent between 2007 and 2008.  The value of subject imports rose even more rapidly, 
increasing by 294.5 per cent between 2004 and 2008, by 60.2 per cent between 2006 and 2007, and by 
19.8 per cent between 2007 and 2008.     In relative terms, both the ratio of subject im ports to US production and the ratio of subject 
imports to US apparent consump tion rose throughout the period examined, and both ratios were at 
their highest levels of the period in 2008.  The ratio of subject imports to US production increased 
by 22.0 percentage points between 2004 and 2008,  with the two largest year-to-year increases 
occurring at the end of the period in 2007 and 2008.  The ratio of subject imports to US apparent 
consumption increased by 12.0 percentage points dur ing the period examined, with the two largest 
year-to-year increases also occurring at the end of the period in 2007 and 2008.   
 
3. Description of the product involved 
 
 Passenger vehicle and light truck tires consis ting of new pneumatic tires, of rubber, from 
China, of a kind used on motor cars (except racing cars) and on-the-highway light trucks, vans, and 
sport utility vehicles, provided for in subheadi ngs 4011.10.10, 4011.10.50, 4011.20.10, and 
4011.20.50 of the Harmonized Tariff Schedule of the United States.   
 
4. Description of the measure 
 
 The measure is an additional duty, above th e MFN duty, on imports of certain passenger 
vehicle and light truck tires from China, as describ ed in item 3.  The additional duty will be 35 per 
cent ad valorem  for the first year of relief, 30 per cent ad valorem  for the second year, and 25 per cent 
ad valorem  for the third year.   
 G/SG/N/16/USA/5/Suppl.1 
Page 3 
 
 
  5. Remedy Phase 
 
 Under the relevant US law, the USITC makes th e market disruption determination and, if that 
determination is affirmative, also makes a reco mmendation regarding the appropriate measure to 
remedy the market disruption found to exist.  Th e President then makes the determination regarding 
what measure, if any, to impose.  In its report, the USITC had recommended the imposition of an 
additional duty, above the MFN duty, for a three-y ear period, with the amount of the additional duty 
set at 55 per cent ad valorem  for the first year of relief, 45 per cent ad valorem  for the second year, 
and 35 per cent ad valorem  for the third year to address the market disruption caused by rapidly 
increasing imports from China.   
 
 On 15 July 2009, the United States Trade Re presentative (USTR) issued a Federal Register 
notice (74 Fed. Reg.  34387) inviting any interested parties to submit views and evidence on the 
appropriateness of the USITC's proposed remedy and whether it would be in the public interest.  
Interested parties were also invited to submit co mments on other possible actions.  A public hearing 
was held on 7 August 2009.  At the hearing, inte rested parties presented their views and evidence 
regarding the proposed remedy, an d were allowed an opportunity to  respond to the presentation of 
other parties, both orally at the hearing and in writing in post-hearing submissions.     The President, taking into account the inform ation gathered by the USITC and the USTR's 
fact gathering process, further economic analysis conducted by USTR and an  interagency team, and 
other pertinent information, made his determina tion to impose the additional duties described in 
section 4.    
6. Effective date of the measure 
 
 The measure will become effective on 26 September 2009.   
 
7. Expected duration of measure 
 
 The measure is for three years, and is sc heduled to terminate on 25 September 2012.   
 8. Additional information  
 The USITC determination has been provided electr onically with this notification.  It can also 
be found on the USITC's website at http://www.us itc.gov/publications/saf eguards/pub4085.pdf.   
 
 The President's determination can be found at 74 Fed. Reg. 47433 (16 September 2009).  The 
proclamation can be found at 74 Fed. Reg. 47861  (17 September 2009).  Both are attached.   
  Additional information regarding the measure can be found at www.ustr.gov.    G/SG/N/16/USA/5/Suppl.1 
Page 4  
 
  Federal Register  / Vol. 74, No. 178 / Wednesday, Septem ber 16, 2009 / Presidential Documents 
47433   
 
PRESIDENTIAL DOCUMENTS 
 
Presidential Determination No. 2 009–28 of September 11, 2009  
 Imports of Certain Passenger Vehicle and Light Truck Tires From the People's Republic of 
China  
Memorandum for the Secretary of Commerce[,] the Secretary of Labor[, and] the United States 
Trade Representative  
 
 On July 9, 2009, the United States International Trade Commission(USITC) submitted a report to me that contained a determination pursu ant to its investigation under section 421 of the 
Trade Act of 1974, as amended (the ''Trade Act''), th at certain passenger vehicle and light truck tires 
from the People's Republic of China (China) are be ing imported into the United States in such 
increased quantities or under such c onditions as to cause or threaten to cause market disruption to the 
domestic producers of like or directly competitive products.     By proclamation I have issued today (the ''pr oclamation''), and after c onsidering all relevant 
aspects of the investigation, I have proclaimed actio ns of the type described in section 421(a) of the 
Trade Act. I have determined that the most appropr iate action is application of an additional duty on 
imports of certain passenger vehicle and light truck tires from China, as defined in paragraph 4 of the 
proclamation. I have also determined that such acti on shall be in effect for a period of 3 years.   
 
 Specifically, I have proclaimed an additional duty on imports of the products described in 
paragraph 4 of the proclamation, which for the fi rst year shall be in the amount of 35 percent ad 
valorem  above the column 1 general rate of duty. Fo r the second year, the additional duty shall be in 
the amount of 30 percent ad valorem  above the column 1 general rate of duty, and in the third year, 
the additional duty shall be in the amount of 25 percent ad valorem  above the column 1 general rate of 
duty.   
 
 In order to assist workers, firms, and their co mmunities that have been or are affected by the 
market disruption, I direct the Secretary of Co mmerce and the Secretary of Labor to expedite 
consideration of any Trade Adjustment Assistan ce applications received from domestic passenger 
vehicle and light truck tire producers, their work ers, or communities and to provide such other 
requested assistance or relief as they deem appropria te, consistent with thei r statutory mandates.   
  The United States Trade Representative is au thorized and directed to publish this 
memorandum in the Federal Register .  
  
 THE WHITE HOUSE,  
 Washington, September 11, 2009  G/SG/N/16/USA/5/Suppl.1 
Page 5 
 
 
  Federal Register 
Thursday, September 17, 2009 
 
Part II 
The President 
 
Proclamation 8414 – To Address Market disruption from Imports of Certain Passenger Vehicle 
and Light truck Tires From the People's Republic of China  Presidential Documents  
 
Federal Register 
Vol. 74, No. 179  
Thursday, September 17, 2009   Title 3— The President  
 
Proclamation 8414 of September 11, 2009  
 
To Address Market Disruption From Imports of  Certain Passenger Vehicle and Light Truck 
Tires From the People's Republic of China  
 
By the President of the United States of America  
 
A Proclamation 
 1. On July 9, 2009, the United States Inte rnational Trade Commission (USITC) transmitted to 
me a report on its investigation under section 421 of  the Trade Act of 1974, as amended (the ''Trade 
Act'') (19 U.S.C. 2451), with respect to imports of certain passenger vehicle and light truck tires from the People's Republic of China (China). In its re port, the USITC stated that it had reached an 
affirmative determination under section 421(b)(1) of the Trade Act that certain passenger vehicle and 
light truck tires from China are being imported into the United States in such increased quantities or 
under such conditions as to cause or threaten to caus e market disruption to the domestic producers of 
like or directly competitive products.   2. For purposes of its investigation, the USITC de fined certain passenger vehicle and light truck 
tires from China as new pneumatic tires, of rubber, fro m China, of a kind used on motor cars (except 
racing cars) and on-the-highway light trucks, va ns, and sport utility vehicles, provided for in 
subheadings 4011.10.10, 4011.10.50, 4011.20.10, and 4011.20.50 of the Harmonized Tariff Schedule of the United States (HTS).    3. The USITC commissioners voting in the affi rmative under section 421(b) of the Trade Act 
also transmitted to me their recommendations made  pursuant to section 421(f) of the Trade Act (19 
U.S.C. 2451(f)) on proposed remedies that, in their view, would be necessary to remedy the market 
disruption and the basis for each recommendation.    4. Pursuant to section 421(a) of the Trade Act ( 19 U.S.C. 2451(a)), I have determined to provide 
import relief with respect to new pneumatic tires, of  rubber, from China, of a kind used on motor cars 
(except racing cars) and on-the-highway light trucks , vans, and sport utility vehicles, provided for in 
subheadings 4011.10.10, 4011.10.50, 4011.20.10, and 4011.20.50 of the HTS.    5. Such import relief shall take the form of  an additional duty on imports of the products 
described in paragraph 4, imposed for a period of 3 years. For the first year, the additional duty shall G/SG/N/16/USA/5/Suppl.1 
Page 6  
 
  be in the amount of 35 percent ad valorem above the column 1 general rate of duty. For the second 
year, the additional duty shall be in the amount of 30 percent ad valorem above the column 1 general 
rate of duty, and in the third year, the add itional duty shall be in the amount of 25 percent ad valorem 
above the column 1 general rate of duty.    
6. Section 421(m) of the Trade Act (19 U.S.C. 2451(m)) provides that import relief under this 
section shall take effect not later than 15 days af ter the President's determination to provide such 
relief.   7. Section 604 of the Trade Act (19 U.S.C. 2483) authorizes the President to embody in the HTS 
the substance of the provisions of that Act, and of other acts affecting import treatment, and actions 
thereunder, including the removal, modification, c ontinuance, or imposition of any rate of duty or 
other import restriction.    
NOW, THEREFORE, I, BARACK OBAMA, President of the United States of America, 
acting under the authority vested in me by the Constitution and the laws of the United States of 
America, including but not limited to sections 421 and 604 of the Trade Act, do proclaim that:  
  (1) In order to apply additional duties on imports of the certain passenger vehicle and 
light truck tires from China described in paragrap h 4, subchapter III of chapter 99 of the HTS is 
modified as provided in the Annex to this proclamation.  
 
 (2) The modifications to the HTS made by this proclamation, including the Annex thereto, shall be effective with respect to  goods entered, or withdrawn from warehouse for 
consumption, on or after 12:01 a.m. EDT on Septem ber 26, 2009, and shall continue in effect as 
provided in this proclamation and its Annex, unless such actions are earlier expressly modified or 
terminated.  
  (3) Any provisions of previous proclamations  and Executive Orders that are inconsistent 
with the actions taken in this pr oclamation are superseded to the ex tent of such inconsistency.  
 
IN WITNESS WHEREOF, I have hereunto set my hand this eleventh day of September, in 
the year of our Lord two thousand nine, and of th e Independence of the United States of America the 
two hundred and thirty-fourth.  G/SG/N/16/USA/5/Suppl.1 
Page 7 
 
 
  Presidential Documents  
 
Federal Register 
Vol. 74, No. 179  
Thursday, September 17, 2009  
 
ANNEX 
 
MODIFICATIONS TO THE HARMONIZED TARIFF  
SCHEDULE OF THE UNITED STATES 
 
 
Effective with respect to the product of China that are entered, or withdrawn from warehouse 
for consumption, on or after Sept ember 26, 2009, subchapter III of chapter 99 of Harmonized Tariff 
Schedule of the United States is modified as set forth herein:   
 
1. The following new U.S. note is inserted in numerical sequence in such subchapter: 
 
"14. (a) For the purposes of subhead ings 9903.40.05 and 9903.40.10, the 
duties provided for in this subchapter are cumulative duties which apply in addition to the duties otherwise imposed on the articles involved.   
 
 (b) The duty rates provided for in  such subheadings shall each be 
reduced as follows:   
    September 26, 2010 through September, 25, 2011...............30% 
   September 26, 2011 through September, 25, 2012...............25% 
  No rate of duty provided for in such  subheadings in chapter 99 shall be 
imposed on any article described in su ch subheadings after the close of 
September 25, 2012."   
 
2. The following new subheadings and superior te xt are inserted in numerical sequence, with the 
language inserted in the columns entitled "Heading/S ubheading", "Article Description", and "Rates of 
Duty I General", respectively:    9903.40.05 "New pneumatic tires, of rubber, th e foregoing the product of China, under the terms 
of U.S. note 14 to this subchapter:  Radial  tires of a kind used on motor cars (other 
than racing cars), station wagons, sport u tility vehicles, vans and on-the-highway 
light trucks (provided for in subh eading 4011.10.10 or 4011.20.10.............. 35% 
 9903.40.10 Other tires of a kind used on motor cars (other that racing cars), station wagons, sport 
utility vehicles, vans and on-the-highway lig ht trucks (provided for in subheading 
4011.10.50 or 4011.20.50)...............35% 
   
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