The Square Tire appears in all 3 of the Mario Kart Arcade GP games. This item looks like well... a square tire.
You throw the Square Tires at the other racers which will cause the racer affected to will have a harder time steering. The effect wears off after 20 seconds.
The Square Tires get a triple version in Mario Kart Arcade GP DX. Which allows you to throw three sets of Square Tires.