UPDATE 1-Tire retailers warn of job losses if China curbed

* Steelworkers seek curbs on tire imports from China

* Union blasts automakers for trying to exempt some tires

* Opponents say curbs will hurt consumers

By Doug Palmer

WASHINGTON, Aug 7 (Reuters) - U.S. tire distributors urged President Barack Obama on Friday not to force them into laying off workers by curbing tire imports from China and U.S. automakers asked to be shielded from any protection Obama might impose to try to save U.S. Steelworker union jobs.

"We all have action plans prepared for (the possibility curbs go) into effect. And each one of them unfortunately involves a significant loss of jobs in our companies," said Jim Mayfield, president of the Del-Nat Tire Corp., testifying on behalf of the American Coalition for Free Trade in Tires.

Mayfield, at a hearing conducted by the U.S. Trade Representative's office to weigh what many believe is a major test case for Obama on trade, said two members of his coalition feel strongly that their businesses would be at risk if the curbs are introduced.

The U.S. Steelworkers union, which represents workers at major U.S. tire manufacturers, filed a petition earlier this year for import relief and won a favorable ruling from the U.S. International Trade Commission.

However, no U.S. tire manufacturer joined the union in bringing the case even though imports from China have risen to about 46 million in 2008, from 15 million in 2004.

Leo Gerard, president of the Steelworkers union, said on Friday that was because the companies have operations in China and fear retaliation there if they speak up.

But opponents of the relief said U.S. tire manufacturers like Bridgestone/Firestone, Goodyear (GT.N), Michelin (MICP.PA) and Cooper (CTB.N) made a decision years ago to get out of the low end of the tire market that China supplies and have no intention of returning to it, even if relief is provided.

"Their comment for us is there's nothing for them to gain from this process," Mayfield said.

Steelworkers argue protection is needed to save U.S. jobs and to prevent Chinese firms from moving up the "value chain" into the high-performance tires that U.S. companies now make.

But opponents said curbs would only boost costs for consumers, cause U.S. wholesalers and retailer to scramble to find other suppliers and not create any new tire-manufacturing jobs in the United States.

The ITC has recommended a 55-percent tariff on the Chinese tire imports which would be reduced to 45-percent in the second year and 35-percent in the third before being removed.

That would effectively cut off imports from China because they are already being sold at a very low profit, Mary Xu, deputy secretary general of the China Rubber Industry Association, told the Obama administration.

U.S. tire retailers would be forced to buy from higher-priced suppliers ad cut jobs in order to control costs, Mayfield said, citing a study done by Rutgers University professor that said the ITC's proposed remedy would cost at least 25,000 jobs in the United States.

Meanwhile, the Big Three U.S. auto companies asked that original equipment tires be excluded from any relief that Obama imposes, a position Gerard called "utterly disgusting" after the carmaker have themselves received massive government aid.

Automakers have invested millions of dollars to source original equipment tires from suppliers in China and will "have no choice but to absorb the additional cost if higher duties are imposed," Charles Uthus, vice president of Automotive Trade Policy Council.

Obama must decide on the steelworkers union's request for curbs on tire imports from China by Sept. 17, one week before he hosts Chinese President Hu Jintao and other leaders of the Group of 20 countries in Pittsburgh to discuss joint efforts to revive the international economy.

The steelworkers asked for protection under Section 421 of U.S. trade law, which only requires petitioners to show that imports from China have disrupted the U.S. market -- not that they have benefited from unfair trade practices.

Friday's hearing was part of the information gathering process leading up to Obama's decision.

The USTR, in consultation with the U.S. Treasury Department, the State Department and other cabinet agencies, must forward its recommendations to Obama by Sept. 2.

Obama could decide to impose a different remedy than the ITC has proposed or not provide any relief at all.

(Reporting by Doug Palmer; editing by Phil Stewart and Bill Trott)