The auto industry wants a ‘brake’ on the tariffs
Of all the things people imagine being imported from China — toys, electronics, or Make America Great Again caps — no one would think that some of the world’s best car brakes are made there.
“The problem with replacing the brake parts that come from China is that there is little or no production around the rest of the world, and their stuff is very good quality,” says Barry Steinberg, the owner of Direct Tire, a Boston area automotive and tire service.
He says that the brake parts produced in China are cheap because they use local energy sources as well as their own mining and metal resources. “The other countries just couldn’t afford to compete with them. Canada used to be one of the bigger manufacturers of brake parts maybe 10 or 15 years ago, but then China came in and they were 30 or 40 percent cheaper than anybody anywhere,” says Steinberg. “China made the product so inexpensive so nobody could compete. And they’re good at it.”
He remembers the tire tariffs on Chinese products during the Obama administration, and how that affected supply – there was no inventory until production shifted to Thailand and Vietnam. He doesn’t expect the factories in China to shut down, but the prices will definitely go up – and the consumer will face the brunt of the price hike. “The public is going to pay more for its goods and services. It’s sad.”
What Steinberg is trying to do is spare the consumer and hold off on the price increase for as long as possible — unlike some of his competitors who have already increased their prices. “We’re going to try to hold the prices until our inventory is such that it’s all at new prices. A lot of business people say that’s a bad practice, but we’re trying to be fair to the consumer and give them enough notice.”
Una Hajdari is the 2018 Elizabeth Neuffer fellow at the International Women’s Media Foundation and a research fellow at MIT’s Center for International Studies.