96.5 F

Davis, California

Thursday, July 18, 2024

Distributors drive up tire prices

Add another reason to leave the car in the garage: Car tire prices are on the rise this winter.

Though big increases in tire prices hit in 2008, some tire distributors are still pushing up costs for American drivers.

Modern Tire Dealer, a trade publication, reported 9 percent increases in tire prices in 2008 from 2007 and 25 percent increases from 2005. A MTD representative said more tire companies are increasing prices. Following the usual pattern of tire sales, higher prices can be traced back to higher costs of material.

Tim Rowland, manager at Les Schwab Tires on Chiles Boulevard in Davis, said his shop’s tire prices will stay relatively level this fall and winter, but admits 2008 was a rough year for his prices and the entire industry.

“We have seen bigger increases than ever seen before,” Rowland said.

Pricing follows simple logic. When the materials get pricey, so do the tires. Steel has been selling at record highs, natural rubber was up 700 percent, and oil reached record highs per barrel – making tire-producing materials some of the priciest on the market, Rowland said.

In September, President Obama signed a tariff that will tax Chinese imported tires. The American-based tire industry was suffering in the battle against cheap, outsourced products. After reviewing the United States International Trade Commission report, a 35 percent tariff was added to imported tires.

“We don’t have a fair global trading system,” said Wayne Ranick, communications director for the United Steelworkers International, a tire union. “Trade imbalances have been going on for decades or longer.”

The tariff on Chinese imports is a small victory for the union. USW proposed even heavier tariff percentages over a three-year period on Chinese tires. But the money from the tariff may help some American tire plants survive, Ranick said.

“We have shifted too many jobs overseas,” Ranick said. “Products are cheaper but millions of jobs have been lost [in the U.S.].”

The tariff is a step forward for the tire industry and it should not affect how much American customers are shelling out at the tire shop. The average American should not feel the direct brunt of the tariff, Ranick said.

“According to the ITC investigation, we did not see a major increase [in tire prices],” Ranick said.

A Davis tire salesman from Vander Hamm Tire Center said the average price for a set of four tires starts at around $500 and continues to increase each year.

The tariff on Chinese tire imports will not affect his Davis customers because Vander Hamm does not handle Asian imports, which are usually cheaper tires. Most cars Americans drive use middle price range tires, so the increased tariff will not directly affect tire customers, the Vander Hamm salesman said.

The Obama-backed tariff affects more people behind the scenes, but it is also a symbolic change, letting Americans know the administration cares about local industries, Ranick said.

“This is the first case we see evidences that the administration is taking action and trying to seek greater enforcement of trade laws,” he said.

SASHA LEKACH can be reached at city@theaggie.org.


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