ProPublica have followed the journey of a car tire – from a rubber plantation in Southeast Asia to a repair shop in the United States – to illustrate the ongoing challenges faced by the global economy.
In the United States, tire prices have risen an average of 21.4% over the past two years. That price rise is just for the tire itself, factor in the rising cost of labour to fit the tires, and American motorists are feeling the pinch on this essential, but rarely budgeted for, item.
This article traces the causes of that price rise. Starting in the rubber plantations of Thailand and Malaysia two years earlier, where COVID shutdowns prevented migrant workers reaching the plantations and rubber output fell. By early 2021, rubber futures prices had jumped nearly 50%.
This story then heads north-west, up from Asia and into Eastern Europe, where Russia’s invasion of Ukraine added more cost to this tire supply chain. Synthetic rubber is made from petroleum, and oil prices jumped after Russia’s invasion. On top of that, Russia was the world’s second-largest exporter of carbon black, a powder that is essential to tire production. (One expert in the article explains, “without carbon black, a tire would be like a rubber band”).
From the cost of these raw inputs, to the cost of ocean freight, labour and even changing trade policies and tariffs, there have been so many factors that have led to the increase in the price of tires. A reminder that the inflationary pressures in the economy will take some time to unwind.
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