UPDATE 3-Chinese imports harming US tire market -US panel
* Steelworkers call on Obama to keep campaign pledge
* Chinese producers say tariffs would cost U.S. consumer (Adds statement by tire importers, paragraphs 9-10; edits)
WASHINGTON, June 18 (Reuters) - A U.S. trade panel said on Thursday China was flooding the U.S. market with tires, the first step in a test case of how the Obama administration will handle trade disputes with Beijing.
In a 4-2 vote, the International Trade Commission found that a surge of low-cost tires from China had disrupted U.S. markets. Later this month, it will recommend a remedy to President Barack Obama.
The United Steelworkers union, which brought the complaint arguing that the imports have cost thousands of U.S. jobs, wants Obama to cap Chinese tire imports at their 2005 level.
Responding to the ruling, the union's president Leo Gerard said the union hoped Obama would keep "a campaign pledge to crack down on China's unfair trading practices."
"Our domestic industries cannot survive unless our government enforces the trade laws that are designed to curb and dissuade anti-competitive practices that cause market disruptions," Gerard said in a statement.
Lawyers representing Chinese tire producers argue that U.S. companies largely abandoned the low-range tire market before Chinese manufacturers moved in. They also noted that no U.S. tire producers had joined the steelworkers' complaint.
Vic DeIorio, executive vice president of Chinese tire maker GITI, said he was disappointed but did not believe U.S. manufacturers would increase production of low-cost tires.
"Instead, if there is a barrier placed on tires produced in China, we believe that U.S. manufacturers will simply increase importation of tires from other countries, such as Poland and Venezuela," he said. "We also believe that quotas or tariffs will lead to higher costs for American consumers."
IMPORTERS DISAPPOINTED
Tire importers in the United States who opposed the steelworkers' petition said they were disappointed as well.
"I hope that the President will listen to the hundreds of small businesses who provide American consumers with safe, quality tires they need at an affordable price, and whose businesses will suffer if imports are restricted," said Jim Mayfield of Del-Nat Tire Corporation of Memphis, Tennessee.
The commission is expected to recommend a remedy by the end of June. A presidential decision is not due until September.
Trade experts are watching to see whether Obama, who won strong labor support in his bid for the White House, will be tougher on China than predecessor George W. Bush, who routinely rejected petitions for restricting Chinese imports. Continued...
