As our new president is inaugurated in Washington, D.C., today Traction News asks, will Donald Trump’s administration be good or bad for your business and for the U.S. tire industry as a whole?
President Trump spent a good deal of time on the campaign trail saying he will scrap or “renegotiate” the North American Free Trade Agreement (NAFTA) and pull out of the Trans-Pacific Partnership (TPP). He also said he will enact tariffs for U.S. companies that manufacture their products overseas and import them for sale in the U.S. There’s also been talk of a onetime “onshoring” tax rate of ten percent for any company that moves back to the U.S.
This week Traction News has been gathering up tire industry opinions on the incoming Trump administration and speaking with insiders to ask them what impact they thought the new president would have on us.
Bridgestone says a growing economy will create jobs
Bridgestone Americas Inc., vice president of communications, Paul Oakley, said it would take some time to assess the plans of the incoming administration.
“Our hope is the new President and new Congress will develop policies to grow our economy and create jobs,” he said. “Growing our economy will help our business and independent tire dealers. We are the world’s largest tire and rubber company so, generally speaking, we support free and fair trade. When we compete on a level playing field, we are confident we can do well.”
The Rubber Manufacturers Association is hopeful
President and chief executive of the Rubber Manufacturers’ Association Anne Forristall Luke is excited about Trump’s nominee for Secretary of Transportation, Elaine Chao.
Forristall Luke said that Chao is a “highly qualified, seasoned and well-respected nominee” for Secretary of Transportation. “Her prior experience… should enable her to quickly organize her team and work to lead administration efforts on transportation infrastructure improvement and to finalize important safety regulations.”
Forristall Luke said the RMA will work with the Trump administration as it had with previous administrations. “RMA will engage with the incoming administration’s transition team and work to educate incoming appointees, policymakers and new members of Congress about the issues important to U.S. tire manufacturers and the people and communities we serve,” she said.
In a mock election at the Global Tire Expo in Las Vegas the first week of November, the Tire Industry Association found that 56.8 percent of 725 attendees voted for Trump, 43.19 percent for Clinton — suggesting the incoming president is popular with the industry.
Roy Littlefield, TIA executive vice president, said after the election that he expected some good things to happen for tire dealers in a Trump administration, but added there are “some question marks.”
“With a Republican White House, Senate and House of Representatives, there are a lot of issues the GOP could advance, including estate tax repeal, which is a big issue for us,” Littlefield said. “We’ll see a lot of positive things happening.”
Goodyear says it’s too early to tell Trump’s effect
Goodyear director of national media Keith Price told us this week: “If you’re monitoring the news, it changes daily. It’s probably best not to speculate but to wait and see what they (the Trump administration and the new Congress) want to do.”
Goodyear produces plenty of tires in Mexico so it seems logical any change to NAFTA could affect one of the industry’s biggest players. But Price says no.
“We continually look at our manufacturing footprint and our strategy is to produce tires as close as possible to where we sell them. The vast majority of tires we sell in the U.S are made in the U.S. We’re not anticipating making any near-term changes to our current manufacturing footprint.”
He told us that essentially the only tires sold in the U.S. that aren’t manufactured here are OEM tires for vehicles manufactured in Europe and other places.
Titan International gets ahead of the curve
Titan International has long been involved in matters relating to tire imports — one area that could seriously be affected by the Trump administration’s plans for international trade arrangements.
Titan appeared before the U.S. International Trade Commission (USITC) on January 4 and filed a post-hearing brief on January 11. Most of Titan’s tires are made in either India or Sri Lanka and are already subject to tariffs of five percent and 3.2 percent, respectively.
The company is optimistic that the USITC will deliver a favorable ruling for them that will cause the Department of Commerce to issue final countervailing duty orders. If these orders are issued, importers going forward will have to post cash deposits equal to the countervailing duty margins that are found or listed by the Commerce Department’s final determinations.
Titan president and chief executive Paul G. Reitz said: “Titan will review options once the final ITC outcome is known, which includes a chance to comment on any perceived errors, if identified, in the materials released by the DOC.”
What effect any changes the Trump administration makes to our international trade deals is yet to be seen.