Wednesday, May 02, 2012

Tire Tariffs Cost $1B and $900k Per Job in 2011


From the introduction of the research article "US Tire Tariffs: Saving Few Jobs at High Cost" by Gary Clyde Hufbauer and Sean Lowry of the Peterson Institute for International Economics (emphasis mine):

"In his 2012 State of the Union address, President Obama claimed that “over a thousand Americans are working today because we stopped a surge in Chinese tires.” The tire tariff case, decided by the president in September 2009, exemplifies his efforts to get China to “play by the rules” and serves as a plank in his larger platform of insourcing jobs to America.

However, our analysis shows that, even on very generous assumptions about the effectiveness of the tariffs, the initiative saved a maximum of 1,200 jobs. Our analysis also shows that American buyers of car and truck tires pay a hefty price for this exercise of trade protection. According to our calculations, explained in this policy brief, the total cost to American consumers from higher prices resulting from safeguard tariffs on Chinese tires was around $1.1228 billion in 2011. The cost per job saved (a maximum of 1,200 jobs by our calculations) was at least $900,000 in that year (see table above). Only a very small fraction of this bloated figure reached the pockets of tire workers. Instead, most of the money landed in the coffers of tire companies, mainly abroad but also at home.

The additional money that US consumers spent on tires reduced their spending on other retail goods, indirectly lowering employment in the retail industry. On balance, it seems likely that tire protectionism cost the US economy around 2,570 jobs, when losses in the retail sector are offset against gains in tire manufacturing. Adding further to the loss column, China retaliated by imposing antidumping duties on US exports of chicken parts, costing that industry around $1 billion in sales."

MP: The authors point out "While this figure ($900,000 per job saved) seems extravagant, it is consistent with prior research. Studies repeatedly show that the consumer cost of trade protection typically exceeds, by a wide margin, any reasonable estimate of what a normal jobs program might cost."  In other words, it would cost the economy much less overall to not impose the tire tariffs and instead direct compensation towards workers in the tire industry in some other way.

In fact, it would have been cheaper to just idle the 1,200 tire workers and pay them their full salary, of let's say $75,000 per year, than to impose tariffs that cost the economy almost $1 million per worker.  This is a good example of why economists don't as a group support trade protection and instead favor free trade: the total costs of protectionism always outweigh the total benefits to the  protected industry, resulting in a net loss and making the overall economy worse off, not better off. 

HT: Gene Hayward

65 Comments:

At 5/02/2012 3:41 PM, Blogger Jon Murphy said...

I have to admit, this one tariff I personally object to. Most tariffs I object to on moral and economic grounds, but this one I have a personal disdain for.

I needed new tires for my car because, well, I drive like a guy who learned to drive in Massachusetts. Those damn things are expensive (and I have a small car). Now, the President tells me they are not expensive enough. Well, if he doesn't think so, then he can pay the bill for my four new tires.

 
At 5/02/2012 4:05 PM, Blogger Buddy R Pacifico said...

Are you limited to a choice between tires from either U.S. or Chineses manufacturers? If so, find another tire store.

I go to a major western U.S. chain for tires. On my my last visit, there were tires from Canada, Korea, Thailand, France, Italy and the U.S.

Do higher tariffs on Chinese tariffs benefit U.S. producers? Probably some, but low cost tires from Korea and Thailand likely gain the most sales. I see a lot of Hankook tires on cars.

 
At 5/02/2012 4:07 PM, Blogger Moe said...

Are China's tires on par quality-wise with their other exports?

 
At 5/02/2012 4:07 PM, Blogger Jon Murphy said...

Are you limited to a choice between tires from either U.S. or Chineses manufacturers? If so, find another tire store.

I went to Town Fair Tire. They're a chain around here. Not sure if they are national.

 
At 5/02/2012 4:46 PM, Blogger Benjamin said...

I am getting tired of tariffs.

 
At 5/02/2012 6:57 PM, Blogger Larry G said...

do the tariffs apply to all imported tires or just the ones from China?

Most any tire store these days seems to have some that appear to be imports.

is this some kind of a deal between the US and China as opposed to an overall trade policy on any/all imported tires?

 
At 5/02/2012 7:25 PM, Blogger Jon Murphy said...

do the tariffs apply to all imported tires or just the ones from China?

I believe they are just for Chinese tires.

 
At 5/02/2012 8:54 PM, Blogger Ed R said...

" . . .Instead, most of the money landed in the coffers of tire companies, mainly abroad but also at home."

The Peterson Institute is not correct in its simplistic analysis of the effects of tariffs. The Institute seems to have confused tariffs with import quotas (which do result in higher prices that would mostly flow to the benefit of tire makers in China and the USA) Tariffs improve the terms of trade and contribute to the tax revenue of the importing country -- the USA in this case -- while import quotas do not do either.

I don't think tariffs are a particularly good idea either, but they are definitely preferable to import quotas.

 
At 5/02/2012 9:20 PM, Blogger Ed R said...

And BTW: If the case was made that the Chinese were 'dumping' thir tires (i. e. export prices lower than their domestic prices) a tariff is an appropriate corrective action for the importing country to take. Almost every country has 'anti-dumping' trade policies and the total world economy is more productive and competitive accordingly.

 
At 5/02/2012 9:56 PM, Blogger Abir Mandal said...

Ed: Tariffs increase prices too. A tariff is a tax on the import value so increase prices.

Dumping by the foreign firm is actually what leads to improvement of terms of trade for the imp-orting country.

 
At 5/02/2012 11:26 PM, Blogger Ron H. said...

"do the tariffs apply to all imported tires or just the ones from China?

Most any tire store these days seems to have some that appear to be imports.

is this some kind of a deal between the US and China as opposed to an overall trade policy on any/all imported tires?
"

Read the Peterson Institute Policy Brief at the link provided in the original post.

 
At 5/02/2012 11:44 PM, Blogger Ron H. said...

Ed R: "And BTW: If the case was made that the Chinese were 'dumping' thir tires (i. e. export prices lower than their domestic prices) a tariff is an appropriate corrective action for the importing country to take."

What, if Chinese consumers get screwed by Chinese tire manufacturers, (or by the Chinese government), effectively subsidizing US consumers' purchases of Chinese tires, then the appropriate US action is to retaliate by ensuring US consumers get screwed also, by forcing them to pay higher prices?

Yeah, that makes sense.

"Almost every country has 'anti-dumping' trade policies and the total world economy is more productive and competitive accordingly."

I'm sure you're right. The more everyone pays for things, the better off we all are.

Wait...can that be right?

 
At 5/03/2012 12:00 AM, Blogger Ron H. said...

Ed R,

The US complaint to China probably read something like:

"How dare you people try to sell us tires cheap? We refuse to buy them at such a ridiculous low price, and by imposing this tariff, indicate our determination to pay more. Go ahead and sell those cheap tires to the the rest of the world, but we stand on our principles. If you screw your consumers, we will screw ours also. So - take that!"

Of course this disproportionately hurts poor people, like so many other misguided policies, as wealthy people don't typically buy cheap Chinese tires, so they are mostly unaffected.

 
At 5/03/2012 5:46 AM, Blogger geoih said...

Quote from Buddy R Pacifico: "Do higher tariffs on Chinese tariffs benefit U.S. producers? Probably some, but low cost tires from Korea and Thailand likely gain the most sales."

You've missed the point completely. The tariffs penalize all the consumers, and benefit the politically connected cronies.

 
At 5/03/2012 5:49 AM, Blogger geoih said...

Quote from Ed R: "Tariffs improve the terms of trade and contribute to the tax revenue of the importing country -- the USA in this case -- while import quotas do not do either."

How does paying an unnecessarily higher price for tires help the USA?

 
At 5/03/2012 5:49 AM, Blogger geoih said...

Quote from Buddy R Pacifico: "Do higher tariffs on Chinese tariffs benefit U.S. producers? Probably some, but low cost tires from Korea and Thailand likely gain the most sales."

You've missed the point completely. The tariffs penalize all the consumers, and benefit the politically connected cronies.

 
At 5/03/2012 7:15 AM, Blogger Gene Hayward said...

A small technical/math mistake the researchers made in this chart. In the last calculation they used "1,074.7" instead of "1,122.8" to divide by 1,200 jobs saved. The latter number would yield the number they posted, the former would yield $895.58B.

 
At 5/03/2012 8:18 AM, Blogger Jon Murphy said...

Tariffs improve the terms of trade

No they don't. They worsen the terms of trade.

A tariff causes prices to rise. This reduces the purchasing power of the importing country's citizens, resulting in dead-weight loss, or wealth lost due to the unnaturally high price.

Think of it this way: every week you go to the store to buy cereal. It costs you $3. You value that cereal at $6 (you'd be willing to pay up to and including $6 for that box). Your consumer surplus (the amount of extra wealth you have) is $3 (what you value the good at minus what you pay; $6-$3=3).

Now, a tariff (tax, whatever) comes along and artificially rises the price to $5. Now, your surplus is just $1, and consumer dead-weight loss is $2. Is that really an improvement to the terms of trade?

By the way, I intentionally left the producer side out of this analysis for the sake of simplicity, but the analysis remains the same. This is a lot easier with a graph, but that is difficult to do in this format.

 
At 5/03/2012 8:29 AM, Blogger Pulverized Concepts said...

The effect of tariffs on consumers is secondary to the immorality of the state interfering with voluntary transactions between ostensibly free individuals. Even if it could be proven that a tariff was beneficial to the economy as a whole in financial terms, its imposition would be still be wrong on moral grounds. The argument that slavery, for instance, might make economic sense in a certain circumstance is no longer considered because it is felt to be morally wrong. The same is true of restrictions on trade, even though statists ignore the moral aspect and mis-interpret the economic one.

 
At 5/03/2012 8:51 AM, Blogger Moe said...

Tariffs are highly politiczed - ergo - morals take a back seat, or rather, they are not even along for the ride.

 
At 5/03/2012 8:55 AM, Blogger morganovich said...

tariffs are ALWAYS a net jobs destroyer because tariffs always result in a net deadweight loss for an economy. this is a simple and unavoidable fact.

they continue to be supported because the benefits accrue to small, politically active and visible groups, while the harm is diffuse.

jon-

i hear you on tires man. i just put new rear tires on my car yesterday. the price for 2 tires was over $1100 after install costs etc.

there seem to be lots of cheap tires at the low end, but god help you if you own a sportscar. the z rated stuff is NOT cheap and is soaring in price. those tires were $800 2 years ago.

 
At 5/03/2012 9:06 AM, Blogger Moe said...

I've been looking one of these guys over, gonna take a test drive this weekend. Low mileage - no tires!

http://www.vannercentral.com/images/Old_Horse_2.jpg

 
At 5/03/2012 9:56 AM, Blogger Hydra said...

One of my cars had those high end tires on it. Never again. Hitting A pothole shoudn't cost you over $800, and the tires aren't THAT much better, even though they did corner like rails.

Then there is the other end of the story, remember the Chinese tires with huge failure rates?

Every thing has a trade off, and the best answer is seldom at either end of the spectrum.

 
At 5/03/2012 10:03 AM, Blogger morganovich said...

hydra-

i have actually found the low profile z rated runflats to hold up well to road abuse. i have never had one flat from hitting anything, and i have been running them on various cars for over a decade.

they just wear quickly. 10-12k miles and the rears are shot.

i heartily agree that putting such tires on most cars is a waste, especially anything front wheel drive, but i think it would be sacrilege not to put such tires on a real sportscar. why drop six figures on a car only to fail to connect it to the road?

for an excellent example of this, try driving a tesla roadster. they took one of the best handling chassis in the world, the lotus elise, and turned it into a car that handles like a pickup truck by taking all the camber out of the rears and putting hard, low rolling resistance tires on it. you can out corner a tesla in an suv.

 
At 5/03/2012 10:05 AM, Blogger Hydra said...

and consumer dead-weight loss is $2. Is that really an improvement to the terms of trade?

=================================

Where did the $2 go? It had to go back into trade someplace.

It is like the old riddle: Three people are sharing a hotel room (don't ask why) and the clerk charges them $30.

Later he discovers it should have been only $25, so he gives the bellhop $5 and tells him to go give the customers a refund.

In order to make the division easier, he keeps $2 and gives each person a dollar back. They have now each paid $9.

Three times nine is $27 and the bellhop has $2, so where did the other dollar go?



Sure there is a loss, but it isn't all that it appears to be.

 
At 5/03/2012 10:09 AM, Blogger Ed R said...

" . . . tariffs are ALWAYS a net jobs destroyer because tariffs always result in a net deadweight loss for an economy. this is a simple and unavoidable fact."

Well, it is not that simple and unavoidable.

You (and some others) seem to assume the the (tariff-increased) higher prices paid for Chinese tires goes to Chinese (or American) tire makers. The tariff revenue goes straight to the coffers of the US Govt. The Chinese sell fewer tires because they cost more (thus improving our terms of trade); and the US tire makers sell more tires, hire more tire workers etc.

Tariffs were the principal source of revenue for the Federal Govt. for about the first 125 years of our history, until income taxes surpassed them in the WW1 era. Was that 125 years of revenue for the USG a 'deadweight loss'??

 
At 5/03/2012 10:18 AM, Blogger Hydra said...

Usually you find another tire store or brand AFTER you discover you are dissatisfied with the previous purchase. The substandard or unscrupulous provider has made his profit, and it takes a long time for your dissatifaction to infect the market.

The first time I replaced the tires on my Prius, I got tires that were perfectly OK so far as they went, but after I drove on them for a couple of weeks, I discovered they had reduced the MPG reported on my Prius mileage computer by over 10%.

A mistake like that on a pickup that gets lousy mileage to begin with, could cost a bundle. And unless you had the mileage computer, you might never notice.

The market will eventually solve that problem, but in the meantime, a lot of people are making "choices" that they are not aware of, and the dealers are not helping.

 
At 5/03/2012 10:28 AM, Blogger Jon Murphy said...

Where did the $2 go? It had to go back into trade someplace.

That $2 isn't a physical $2 that you can hold or see. It's a value. You are now $2 worse off because you now have to spend more to get less. It just disappears, I guess is the best way to describe it. It's not completely accurate, but probably the simplest way of describing it.

Or, if you want to put a face on it, consider that $2 the enforcement cost of the tariff. It has to go pay someone to collect the tariff, monitor everything, etc. That $2 wealth is removed from the marketplace and re-positioned to a less necessary action.

 
At 5/03/2012 10:38 AM, Blogger Hydra said...

they just wear quickly. 10-12k miles and the rears are shot.

================================
Mine did better than that, maybe 25K. That soft rubber compund sticks like glue but does not wear well.

You must drive pretty hot.

On the other hand, I once put some really high guarantee Michelins on that wore like iron, and had zero traction. In order to keep from spinning the tires youwound up destroying the clutch. Not a very good trade off. They lasted forever but they were scary.


What I found was the low profile tires didn't offer enough protection to the rim. Not enough room to flex. On one occasion hit a pothole that dented the rim and the collision between the rim and the road pinched the tire and bruised it.Hhad there been 3 or four inches between the rim and the road instead of one inch......

Did it a second time when I hit a six inch boulder that had rolled down the embankment.

We have narrow winding roads, so you keep well to your side in order to have room for oncoming traffic to pass, especially the dually trucks and larger. Lost the passenger side mirror that way once, hit by a sagging tree branch, while I was squeezing right for the oncoming. Maybe the incidents could have been avoided with hypervigilance, but I don't see how, in the dark. Fact remains I never had such incidents with normal tires, and I won;t be having any low profile tires again.

 
At 5/03/2012 10:52 AM, Blogger Hydra said...

Consider that $2 the enforcement cost of the tariff.

==================================

Right. One hopes that the money is used to study tire issues like those described above, and create regulations or knowledge that helps the consumer more than the tariff costs.

[I know, but one can still hope, and at least some of that does happen.]

I deally you want lowest Total Cost = Tire Cost + External Cost + Government Cost.

In the example above, it does not cost the dealer anything not to tell me about the difference in fuel costs. That turns out to be an External Cost that is really part of the Tire Cost. If it costs me less to pay the government to requre the dealer to make better information available, than it costs me to learn the hard way, then I come out ahead on Total Cost.

Even if the tariff is not dedicated that way, the government gets the money and money is fungible,so more is (ostensibly) available for consumer protection somewhere in the system. I may pay more for tires and get the money back in better refrigerators.

This is a hopelessly Pollyanna view, but it is probably no more wrong than the idea that every tariff in every case is universally wrong and evil.

 
At 5/03/2012 11:27 AM, Blogger morganovich said...

hydra-

i definitely drive aggressively (i grew up racing) but you are just not going to get more than 10-12k miles out of those tires no matter what.

run them hot and you can burn them in 6k.

low profile tires are a bad choice for thinner rims. if you are not running at least a 225 (and preferably 255 in the back), don't even think it. the wider spread gives you better shock distribution. you need big wheels too. i would not run low profile on wheels smaller than 18" and prefer 19" or 20" depending on the vehicle.

at 305 and 19", they stick like glue.

dynamic torque vectoring really plays hell with rear tires as well (it brakes the inside rear wheel in hard corners). that will just about rotate a car like a lazy susan, but it's rough on rubber.

i just expect to need tires every 18 months or so on the back (fronts last much longer, generally 2-3X) and i have never had any problems denting a rim even when i lived in san francisco, the foot deep pothole capital of the US.

 
At 5/03/2012 11:28 AM, Blogger Jon Murphy said...

This is a hopelessly Pollyanna view, but it is probably no more wrong than the idea that every tariff in every case is universally wrong and evil.

Well, you're not wrong.

That argument is one often put forth in favor of tariffs. Like I said, it's not wrong.

The argument against tariffs is that, yes all these things can occur. There are those who benefit from the tariff.

However, the cost of the tariff and enforcement, as well as the lost consumer surplus outweigh the benefits of the tariff. This is pretty much universally accepted. I cannot think of a single economist who would argue a tariff benefits all who participate in it (unlike free trade).

The question that is debated in economics is: does this tariff do what we want it to do? In this particular example: is the tire industry in America so vital we are willing to pay higher prices?

Or

Is the fledgling solar panel industry so vulnerable that we should give it special protection until it is big enough to stand on its two feet on the global stage?

You can go n industry to industry. All conspiracy theories aside, this is the main consideration with tariffs.

 
At 5/03/2012 11:41 AM, Blogger juandos said...

Well this same song & dance happened before back in the eighties...

At that time it was Toyo Tires of Japan trying to break into the American market...

 
At 5/03/2012 11:58 AM, Blogger Ed R said...

Just to complete the analysis of what China was doing with its tire pricing and the resulting US tariffs - - -it may be worthy to note the WTO (not exactly a protectionist organization) has upheld the finding of 'dumping' of Chinese tires and the validity of the retaliatory tariffs. [See link below].

http://economyincrisis.org/content/wto-upholds-anti-dumping-duties-chinese-tires

 
At 5/03/2012 12:21 PM, Blogger Abir Mandal said...

Yes since the WTO is the top-dog maintainer of free markets. WTO exists for governments to continue with their crony capitalist policies.

 
At 5/03/2012 12:59 PM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

This tariff policy is typical classic "broken window fallacy" thinking of protectionists. They can show the jobs saved, but ignore the savings (and alternative consumer spending) that would have resulted WITHOUT the tariffs. Sadly, the press seldom gets it either.

Concentration of benefits -- dispersal of costs. And UNSEEN dispersal of costs at that.

Maybe we need a law that requires goods protected by tariffs include a tag as to how much "tax" the consumer is effectively paying for this policy.

I'm kidding abut the law -- I think.

 
At 5/03/2012 1:07 PM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

One fatuous rationale for tariffs is that a domestic "young" industry (such as solar) needs protection until it matures to the point were it can compete with more mature overseas businesses.

Can anyone recall a single instance where a domestic "birth" industry protected by tariffs has later gone to Congress and proudly announced that they no longer needed tariffs to shield themselves from international competitors?

 
At 5/03/2012 1:12 PM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

In wartime,a classic role of navies so to blockade opponents' ports so that they cannot import goods.

So why is imposing tariffs (and quotas and other trade-blocking policies) on our own ports against our own consumers a good idea? Are we at war with ourselves?

Sometimes it seems like it.

 
At 5/03/2012 2:07 PM, Blogger Ron H. said...

"One of my cars had those high end tires on it. Never again. Hitting A pothole shoudn't cost you over $800, and the tires aren't THAT much better, even though they did corner like rails."

Your experience may be different, (no surprise there), but mine has been that the feeling of control provided by high performance tires, as opposed to the constant surprises provided by low end tires is worth the difference in price.

The difference is noticeable on any car, not just performance cars, and not just at high speeds.

You are supposed to avoid potholes, and potholes wouldn't be a problem if roads in your area were privately owned.

Did you really spend $800 for one tire, or was that an extremely large pothole that destroyed all 4? Maybe you missed the 'Road Ends" sign.

 
At 5/03/2012 2:10 PM, Blogger Hydra said...

Morganovich:

Wow.

I can see wider rims would help, you must be running custom stuff, I was running OEM.

 
At 5/03/2012 2:15 PM, Blogger Hydra said...

No, the tire didn't have enough flexible range to protect the rim, so the tire and the rim together were $800.

You are wrong about the private roads. There are private roads here, both on private estates and in HOA situations. They are almost always uniformly worse then the county or state roads.

True, their mission is different, but it canot be said the private roads are better. Besides, we went the private road routine inthe past, and found it did not work.

 
At 5/03/2012 2:17 PM, Blogger morganovich said...

hydra-

those wheels are OEM. 11X19 rims and 305/30 zr19's are standard rears on my car.

my previous sportscar ran 255/35zr19 in the rear and never had an issues either.

 
At 5/03/2012 2:23 PM, Blogger Ron H. said...

"they just wear quickly. 10-12k miles and the rears are shot."

And I suppose you consider that a
tire problem.

 
At 5/03/2012 2:27 PM, Blogger Jon Murphy said...

All I know is tires are expensive.

$200 for 4 tires on my car. I can think of about 200 different ways I'd rather spend that money

 
At 5/03/2012 2:31 PM, Blogger Ron H. said...

"Was that 125 years of revenue for the USG a 'deadweight loss'??"

Yeah, pretty much. Was it better used by government than it would have been in the hands of the people that earned it?

 
At 5/03/2012 2:33 PM, Blogger Hydra said...

I don't deny the feeling on such tires is different.

But after $1600 worth of "surprises" that those tires gave me that a normal and less expensive tire would have easily survived, I came to a different conclusion.

Yes, you are supposed to avoid potholes, but that is not always possible. It is possible to have tires that will survive a pothole and don't cost a bundle. Faced with an oncoming truck on a narrow road you will be hugging the shoulder, where potholes are more likely to form. At night, with headlights in your face and no idea if a stock trailer is behind them, and no room to maneuver anyway, there is not much practical use in saying that potholes are to be avoided.

The pothole is not the thing to be avoided, anyway. The thing to avoid is the $800 surprise, and avoiding potholes is one strategy. Probably not the one with the highest likliehood of success.

Considering the small probablility that the tires alone would save me from some untoward event (Never crashed anything on any kind of tire) and the known probability that a tire will be destroyed by road hazard, my comparison of most probable value suggests that (for me) the high end tires are not worth what they give back.

That is the beauty of the marketplace, no?

 
At 5/03/2012 2:45 PM, Blogger Larry G said...

Jon - did you say $200 for 4?

we paid 200 PER TIRE for our Rav4 and 240 PER TIRE for the Van.

there are Michelin's. They are the only brand tire that I've been able to get 50K from on a truck.

 
At 5/03/2012 2:47 PM, Blogger Jon Murphy said...

Jon - did you say $200 for 4?

I did say that. I also drive a Civic and bought slightly used tires. My tires are much smaller than your's likely are on a van.

 
At 5/03/2012 2:53 PM, Blogger Jon Murphy said...

I should probably also mention I only bought the tire. I did not buy new rims or anything and installed them myself.

 
At 5/03/2012 2:57 PM, Blogger Hydra said...

Was it better used by government than it would have been in the hands of the people that earned it?

=================================

First you need a metric for "better".

If you see someone buying filet mignon wth food stamps would you say that "money" would be better off in the hands of government?

Granted, in this case, the buyer did not "earn" the money, but the point is that it is possible for individuals to spend badly, value judgement not included.

If you are talking a few extra bags of potato chips for some individuals vs the Hubble Space Telescope how do you decide what is a "better" use of the money?

Not making a point here, just asking...

 
At 5/03/2012 3:08 PM, Blogger Hydra said...

Tires are expensive, but consider how much better they are. I can remember going with my father to have retreads put on tires.

I can remember when flat tires were common, you hardly ever see someone by the roadside now.

Just be glad you don't have to buy any tractor tires: those suckers can be $600 - $1000, each. And that is relatively cheap if you just look at the size of the tires, but tractor tires don't have to travel at high speed.

Tires are the bane of my existence: Adding up all the farm vehicles and equipment, I have over 100 tires in use so I am on first name basis with my tire guy.

 
At 5/03/2012 3:09 PM, Blogger Ron H. said...

Ed R:

You do understand that the WTO is a political body, right?

When they rule on a trade issue, they are not considering economics, but compliance with trade agreements.

What the WTO rules has nothing to do with economic benefit or harm, or who benefits or who is harmed, but only compliance.

Trade agreements seldom provide overall economic benefit, but tend to advantage one group over another.

From your reference - this should tell you what you need to know:

"U.S. officials cheered a ruling by the World Trade Organization on Monday that upheld steep tariffs imposed against Chinese tires imports, hailing the decision as a major victory for American manufacturers."

Even at that, it's not much of a victory, as the tariff applies to low end tires, which American manufacturers don't make in large numbers anyway.

And, no mention is made of low income consumers who most now pay more for low priced Chinese tires.

 
At 5/03/2012 3:10 PM, Blogger Jon Murphy said...

Adding up all the farm vehicles and equipment, I have over 100 tires in use so I am on first name basis with my tire guy.

Gee, if what you say about the cost is true (and I'm sure it is), then I sure hope he knows your name!

 
At 5/03/2012 3:10 PM, Blogger Hydra said...

and never had an issues either.

===============================

Jeez, you replace tires almost as often as I change my oil!

 
At 5/03/2012 3:15 PM, Blogger Larry G said...

I buy tires based on CR and some word of mouth.

I want them to last a long time so I buy the ones that will and I think on a cost per mile basis they are cheaper.

I passed one of those tire service trucks the other day hauling what appeared to be a tractor tire and I'm thinking that's NOT a cheap tire he replaced.... not even counting the service call!

 
At 5/03/2012 3:24 PM, Blogger Ron H. said...

"Usually you find another tire store or brand AFTER you discover you are dissatisfied with the previous purchase. The substandard or unscrupulous provider has made his profit, and it takes a long time for your dissatifaction to infect the market."

Did it occur to you to take advantage of available resources like "Consumer's Report", or familiarize yourself with the DOT ratings molded into each tire that indicate traction, temperature, and mileage performance before you bought those unsatisfactory tires, or did you just walk in and demand tires that stuck like glue, but were incredibly inexpensive?

Just wondering.

Is it possible you got what you asked for?

Have you increased the air pressure in them above the 20PSI to which the dealer inflated them because you insisted on a smooth ride?

Is there anything else in your world that might affect gas mileage? A differnt brand of gas, perhaps, or an increase in the ethanol content?

 
At 5/03/2012 3:32 PM, Blogger Larry G said...

aren't those DOT ratings those nasty govt standards?

:-)

 
At 5/03/2012 3:40 PM, Blogger Ron H. said...

"If you see someone buying filet mignon wth food stamps would you say that "money" would be better off in the hands of government?"

I don't care what people buy with food stamps.

Once the money is stolen from me, It's no longer mine, right?

What I WOULD say, is that the money would be better off in my pocket where I can choose how to spend it.

"Better spent" is entirely subjective. Is your money better spent by you, or by someone else? Remember, there is no objective scale of values, only our own subjective ranking.

 
At 5/03/2012 3:43 PM, Blogger Ron H. said...

Jon M: "I should probably also mention I only bought the tire. I did not buy new rims or anything and installed them myself."

What a guy! Were you also able to balance them yourself, or do you not ever drive at a speed that makes that an issue?

 
At 5/03/2012 3:46 PM, Blogger Jon Murphy said...

Were you also able to balance them yourself, or do you not ever drive at a speed that makes that an issue?

No, I had my mechanic do that for me. My mechanical expertise is limited to adding gasoline, changing tires, and adding washer fluid. I forget how much that cost me, but it wasn't too expensive.

 
At 5/03/2012 4:12 PM, Blogger morganovich said...

hydra-

your mention of tractor tires is a bit serendipitous.

someone just pitched me on a company today that makes tractor tires.

http://www.amerityre.com/

i know absolutely nothing about this market or these products.

you ever hear of these guys and/or have any opinion on their products?

 
At 5/03/2012 4:17 PM, Blogger morganovich said...

jon-

i have to say, 4 tires for $200 sounds REALLY cheap to me. not sure why one would call that expensive.

hell, it's easy to spend more than that on 4 running shoes.

 
At 5/03/2012 5:13 PM, Blogger Jon Murphy said...

i have to say, 4 tires for $200 sounds REALLY cheap to me. not sure why one would call that expensive.

To me, that is expensive. That represents about a quarter of my monthly disposable income.

 
At 5/03/2012 6:44 PM, Blogger morganovich said...

ah, well, i guess it just go to show that cheap is always a subjective term.

 
At 5/03/2012 8:39 PM, Blogger VangelV said...

I have to admit, this one tariff I personally object to. Most tariffs I object to on moral and economic grounds, but this one I have a personal disdain for.

Actually, you should object about all tariffs on moral and economic grounds. They harm consumers and protect special interest groups, usually big businesses afraid of competition.

 

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