Trade deficits grow for misc. rubber products and pneumatic tires, tubes.

Deficit grows for misc. products

The U.S. trade deficit in 1992 for miscellaneous rubber or plastics products climbed to $1 billion, due largely to rising imports from China and Canada. This represents a 12% jump, worth $108 million, according to the latest figures from the U.S. International Trade Commission.

The segment covers several thousand finished and semifinished products as diverse as shopping bags, shower curtains, rubber masks and gaskets. Many of the imported items are household articles, including tableware, kitchenware and toilet articles.

Canada, China boost imports

Canada's imports increased from $423 million to $527 million. China boosted its import total from $375 million to $609 million, ranking second behind Taiwan as the major source of miscellaneous rubber or plastics products for the United States. China's growing petrochemical industry provides the raw materials for the relatively inexpensive derivative products it exports to the U.S.

Exports increase to Canada, Mexico

Meanwhile, U.S. exports of these products have increased by $410 million (21%) in 1992, to $2.4 billion, boosted mostly by rising exports to Mexico and Canada. During 1991-92, U.S. exports to Mexico rose from $390 million to $595 million, whereas U.S. exports to Canada rose from $757 million to $832 million. Most of these exports were unfinished plastic products requiring fabrication for packaging or consumer end-use applications. As Mexico's economy continues to grow and Canada's economy slowly recovers from its recent recession, increased U.S. exports of consumer-oriented plastic products to these countries are anticipated.

Exports rise in tube segment

The U.S. has also seen a rising number of exports of new pneumatic tires and tubes in 1992, with most of the 10% increase attributed to Canada, Mexico and Germany. Overall, U.S. exports increased $126 million to $1.3 billion in 1992.

Most of the exports have been related-party transactions by multinational corporations, like Goodyear and Michelin. Acquisitions and mergers of domestic tire companies have created a very concentrated and efficient U.S. tire industry - so much so that every year since 1987, U.S. exports have increased.

This consolidation of the tire industry worldwide has changed the structure of the U.S. industry. internationally, most of the world tire production is by a few multinationals - mainly European and Japanese.

Such is also the case with U.S. imports. According to figures from the International Trade Commission, imports of new pneumatic tires and tubes, particularly from Canada and Brazil, have been mostly related-party transactions by multinational corporations. Import increases were necessary during this period in order to supplement domestic supply, the ITC said. Overall, imports rose 8% in 1992, reaching $2.4 billion.

Negative trade balance grows

The negative trade balance for pneumatic tires and tubes was $1.1 billion in 1992, an increase of $58 million, or 6% in their trade deficit.