Tire fee's

[PARKSINDUST]

So I got an email not too long ago from our tire distributor stating this:

 

As you know, President Obama signed a three-year tariff on China-made consumer tires back in 2009. The duties were in addition to the base 4% tariff which has been in place for years. The three-year tariff went into effect on September 26, 2009 and has now expired.

 

As of September 27th of this year, any products not already processed by customs are no longer subject to the tariffs imposed by the Obama administration. This change will undoubtedly cause some disruption in the market prices for Chinese import tires over the coming weeks. In addition, this event could have an impact on pricing other product lines and price tiers.

 

In light of the tariff expiration, distributors like ourselves have been forced to review and make modifications to our return policies. As a result, effective today, new returns on all Chinese imported tires will be credited at the lesser of price paid or current selling price.

 

If you have any questions, please contact your *** representative in your local distribution center. On behalf of everyone at ****, thank you for your understanding of this policy change, in the face of this unusual industry situation, and thank you for your business.

 

 

Soooo today I was quoting tires and on top of a NTF (New Tire Fee) that I have to charge customers, a FET fee came up on a certain types of tires, that I had never seen before, so I asked and it meant a Federal Excise Tax, which is understandable as tires come from out of the states but how did I never come across that before? Can someone explain all of this to me in laymans terms?? I know there are a lot of pros and cons to obamas tire tariff, but how does this affect us in our industry? So many fees and taxes, and how do I cover myself with all these fees?

Anyone else know about this whole Obama ordeal, I had never heard of it until I got the email from my tire distributor....

[xrac]

Here is what I iknow. A stiff tariff was placed on Chinese tire importants but that is now expired. What you dealer is saying is if tires are returned you will get the lesser of eitgher the current price or what was originally paid for the tires.

 

The tire fee is imposed by the state.

 

FET is a federal tax imposed upon certain heavier tires. This is what I think it is "The rate is $.0945 ($.04725 in the case of a biasply tire or super single tire) for each 10 pounds of the maximum rated load capacity over 3,500 pounds and should be built into the retail price of the tires." You do not see FET on any passenger tires just certain truck, trailer, and heavy equipment tires.

[Joe Marconi]

The Chinese tariff, as in all tariffs, is hard to comprehend. Tire Business Magazine has feature articles on this topic and follows this topic. If you sell tires, I would highly recommend subscribing to this publication. Here’s the link: http://www.tirebusiness.com/

 

From what I understand, the U.S. could only impose a three-year tariff without compensating China. Plus, all the tire companies have been gearing up the past three years and have found ways to be competitive, once the tariffs are lifted.

 

The tariff situation is complicated. There were many, like the Tire Industry Association (TIA) that opposed the tariffs. And, if look back on the last three years, the tariff may have curbed tires from China, but imports from Korea, Indonesia and Thailand increased. I have not read anyway the overall effects of the tariff, but to be honest, it may above my pay grade to understand it in full.

 

Some say tire prices will drop as the supply increase. Also, buying groups stockpiled tires during the tariff period, which will also cause tire prices to decrease, in theory at least.

 

I think we need to remember that during this period we had an economy where fewer cars were built, less new cars were purchased and less miles were driven by the motoring public. And, as the economy improves so will the demand for tires.

 

As far as that notice you got about the lesser price of the Chinese tires, I have yet to hear from my tire distributor. I sell a lot of tires and will forward any information I receive.

[xrac]

The Chinese tariff, as in all tariffs, is hard to comprehend. Tire Business Magazine has feature articles on this topic and follows this topic. If you sell tires, I would highly recommend subscribing to this publication. Here’s the link: http://www.tirebusiness.com/

 

From what I understand, the U.S. could only impose a three-year tariff without compensating China. Plus, all the tire companies have been gearing up the past three years and have found ways to be competitive, once the tariffs are lifted.

 

The tariff situation is complicated. There were many, like the Tire Industry Association (TIA) that opposed the tariffs. And, if look back on the last three years, the tariff may have curbed tires from China, but imports from Korea, Indonesia and Thailand increased. I have not read anyway the overall effects of the tariff, but to be honest, it may above my pay grade to understand it in full.

 

Some say tire prices will drop as the supply increase. Also, buying groups stockpiled tires during the tariff period, which will also cause tire prices to decrease, in theory at least.

 

I think we need to remember that during this period we had an economy where fewer cars were built, less new cars were purchased and less miles were driven by the motoring public. And, as the economy improves so will the demand for tires.

 

As far as that notice you got about the lesser price of the Chinese tires, I have yet to hear from my tire distributor. I sell a lot of tires and will forward any information I receive.

 

Joe, how many units will you sell in a typical month?

[Joe Marconi]

Joe, how many units will you sell in a typical month?

 

We sell on average 100 to 150 units per month