Tariffs make a mad, mad, mad world – to coin a phrase
The reality of tariffs is starting to hit home in the USA, and it will impact the rest of the world unless Trump relents his ill-considered war on trade
News reports are coming in of empty docks and shipless wharfs on the Pacific coast of the USA. Robin Westerna writes in Seemorerocks about Seattle Port, the 4th busiest port in the USA, “There are presently ZERO cargo ships docked or en-route. There are ZERO containers in the yard, and there are ZERO trucks waiting to haul cargo.”
It is estimated that if the tariffs were removed today, it could take between 35 -55 days to return to normality, potentially several months depending upon what China does in the interim.
One Chinese tyre manufacturer revealed the impact of tariffs on its products when entering the USA.
The figures below give an idea of how the price of Chinese manufactured tyres entering the USA are being hit.
- Truck and Bus Tires (TBR) from China to the U.S.:
Anti-dumping duty: 2.83%
Countervailing duty (subsidy-related): 15.67%
Section 301 tariff: 25%
February 2025 tariff: 20%
April 3, 2025 tariff (specific to Chinese goods): 125%
Total tax burden: 188.50%
- Passenger Car Tires (PCR) from China to the U.S.:
Anti-dumping duty: 8.72%
Countervailing duty: 30.61%
Section 301 tariff: 25%
February 2025 tariff: 20%
April 3, 2025 tariff: 25%
Total tax burden: 109.33%
Now, whilst this may, and it is a long shot, may assist US tyre manufacturers to recover market share, and it may drive auto manufacturers to ensure they use non-Chinese sourced tyres.
The larger Chinese tyre manufacturers have manufacturing bases in alternate markets, perhaps only hit by a 10% tariff. It could well be that the manufacture of tyres destined for the USA will be ramped up at those plants. Whilst manufacturing costs may not be as low as they are in China, the final price on the US market will be lower than Chinese produced tyres. All that tariffs will have done is displace the point of manufacture.
if that happens, we can expect increased tariffs on those producing countries.
The whole tariff debacle simple does not make sense. China will displace its exports to new markets, possibly at lower prices, potentially undermining further US exports to those markets.
Images: Seemorerocks and Don Wilson-Flickr
