Best Buy Chief Merchandising Officer Jason Bonfig asked that smartphones, laptops, computers, tablets, TVs, gaming consoles and computer monitors be spared President Donald Trump's threatened fourth tranche of tariffs on China-made products. "U.S. consumers have largely been shielded" so far, Bonfig said during Day 1 of Office of U.S. Trade Representative hearings. Bonfig said brands have been moving manufacturing out of China since enforcement efforts began, but it's a multiyear effort to find new sourcing, and that "cannot be done faster than it’s already going." IRobot CEO Colin Angle has firsthand knowledge of the intellectual property abuses Chinese companies engage in, he testified. But Angle asked the administration not to impose tariffs on the robotic goods it sources from China because his firm, which employs 700 in the U.S., is satisfied with China as a manufacturing platform. Angle, who said iRobot has more than 80 percent of the consumer robot market in the U.S., said his company won a patent-violation case in October, which meant Chinese factories can't export those goods to the U.S. IRobot was the victim of cyberattacks that resulted in intellectual property theft, and two Chinese citizens were indicted for the crime, said Angle. "Moving production to the U.S. would increase our cost of goods sold by 60 percent," Angle said. The Roomba, iRobot's flagship product, has had List 3 tariffs imposed on it since last summer, he said. Comments were due Monday to USTR on the List 4 duties (see 1906170050).

Hearings that begin Monday on the proposed List 4 Section 301 tariffs on $300 billion in Chinese imports not previously dutied will span seven full days through June 25 and include roughly 320 witnesses organized into 54 panels, said the Office of the U.S. Trade Representative Friday. Unless there comes a change in the terms of USTR’s May 17 notice announcing the List 4 tariffs, post-hearing rebuttal comments would be due July 2, seven days after the hearings end, marking the last deadline in the List 4 proceeding before President Donald Trump decides whether to put the duties into effect. USTR ordered List 3 into effect Sept. 24, less than three weeks after post-hearing rebuttals in that proceeding came due Sept. 6. CTA is scheduled to testify the afternoon of June 24 on the same panel as Christie Digital Systems, Jasco Products and JLab Audio. CTA had asked for that arrangement in its June 10 request to appear. Other notables on the witness list: (1) Element Electronics, Best Buy, Roku, iRobot and TCL North America all testifying together Monday on Panel 4; (2) HP testifying Tuesday on Panel 11; (3) the Retail Industry Leaders Association, National Retail Federation and Information Technology Industry Council appearing together Friday on Panel 38; (4) Fitbit appearing June 25 on Panel 50; (5) Sony Interactive Entertainment and Vizio testifying together June 25 on Panel 53.

CTA members identified 139 “line items for technology sector products” they want removed from the coming fourth tranche of tariffs on Chinese imports, commented the association, posted Tuesday in docket USTR-2019-0004. “The annual import value from China of those items alone totals over $167 billion, over half of the entire value of the products on List 4.” Any additional such tariffs would be “detrimental” to CTA members, but a 25 percent duty “could be catastrophic,” said the association. About 400 companies, associations or individuals filed requests by Monday's deadline to speak at hearings that begin June 17 on the proposed tariffs. It took six days of hearings last summer to accommodate the roughly 350 witnesses who testified on List 3. The Office of the U.S. Trade Representative is expected to release a List 4 hearing schedule Friday. “Increasing integration” of information and communication technologies in other sectors means “punitive tariffs” on technology products “will cause a ripple effect” of harm, the group said. Best Buy Chief Merchandising Officer Jason Bonfig will testify at the hearings “on the inefficacy of the proposed tariffs in achieving the objectives outlined by USTR,” said the retailer's lawyers. Best Buy urges USTR to remove laptops, smartwatches, PC monitors, TVs and videogame consoles from List 4. A second filing also cited smartphones.

Best Buy is “actively addressing the risks" of increases to tariffs on Chinese imports, it said in an SEC 10-Q Friday for fiscal Q1 ended May 4. “We have been able to minimize the impact on our business” from the List 3 tariffs “by accelerating purchases and working with our vendors,” it said. The company expects the Trump administration “to continue to seek input into potential further tariff developments,” including the proposed List 4 tariffs on all Chinese imports not previously dutied: “We intend to remain fully engaged in this process. We are also looking into a range of mitigation actions. While our outlook for fiscal 2020 includes the impact of List 3 tariffs increasing from 10% to 25%, we cannot predict, at this stage, the likelihood or impact of further expansion of tariffs to other products we sell or potential new tariffs.” Best Buy paid $125 million for health services company Critical Signal Technologies, completing it May 9, said the retailer. Best Buy disclosed the purchase as part of its connected-health strategy on its May 23 earnings call, but didn't discuss the terms (see 1905230038 or 1905230019).

Antitrust law shouldn’t be used to settle patent disputes, DOJ Antitrust Chief Makan Delrahim said Thursday amid Qualcomm’s antitrust appeal against the FTC (see 1905220035). Antitrust remedies aren’t the proper tools for settling fair, reasonable and nondiscriminatory (FRAND) terms disputes, he told the Organisation for European Economic Cooperation in Paris. Delrahim didn’t directly mention Qualcomm. Relief through contract law is the correct route for deciding proper FRAND interpretations, he said. “Sophisticated commercial parties often view FRAND commitments as a cost-control mechanism” but a more troubling trend is implementers using FRAND “as a source of leverage to demand subcompetitive royalty rates from the owners of patents for new technologies, under threat of litigation,” he said.

"Secondary impacts” of the third U.S. tranche of tariffs on Chinese products to customers of Texas Instruments “is very difficult to measure,” said Vice President-Investor Relations Dave Pahl. “Do we think tariffs are bad thing and do they ultimately destroy demand? Economic theory says it does. So that’s not something that we’re big fans of.” TI's "direct impact is real easy to measure, and it's a number very close to zero," Pahl told a Bank of America Merrill Lynch investor conference Tuesday. U.S. trade law for the semiconductor industry defines country of origin “pretty much” by where products are “assembled and tested,” said Pahl. “We do have assembly test operations in China,” plus a half-dozen other “assembly test sites,” mostly in Asia, so "we can move things around,” he said. The chipmaker hypothetically could move assembly and test operations completely out of China, “given enough time and energy,” Pahl said. “But I don’t think we’d want to. China continues to be an important market.” VTech Communications, which bills itself as “the major supplier” of cordless phones and baby monitors in the U.S., is “hearing” from its big retail customers “that they will pass along the costs directly to consumers” if the Trump administration makes good its threat to impose 25 percent List 4 tariffs on Chinese goods not previously dutied, commented the vendor Tuesday in docket USTR-2019-0004. “This will mean additional financial burden to many low to middle income family households” in the U.S. that “still rely on the corded or cordless telephone as their primary device for communication,” it said. Best Buy and Walmart are among VTech's biggest retail customers, and say 25 percent tariffs would mean price increases (see 1905230038). Wednesday, the Office of the U.S. Trade Representative extended by two weeks to June 15 the deadline when List 3 goods can enter the U.S. at the former 10 percent duty rate if they were already on the water when the tariff increase to 25 percent took effect May 10.

Comments are due June 6 on a Neodron Tariff Act Section 337 complaint at the International Trade Commission, seeking a ban on imports of touch-controlled smartphones, tablets and computers that allegedly infringe its patents, said Wednesday's Federal Register. The Ireland-based company alleges Amazon, Dell, HP, Lenovo, Microsoft, Motorola and Samsung are importing mobile devices that infringe its patented technologies for capacitive touch sensors. Thursday, those companies didn't comment. Neodron seeks a limited exclusion order and cease and desist orders banning importation and sale of infringing devices.

The International Trade Commission is investigating Rovi allegations of patent infringements involving various Comcast set-top boxes, broadband gateways and related hardware and software including remote controls and interactive program guides, it said Thursday. Comcast didn't comment Friday.

The Commerce Department Bureau of Industry and Security added five new national security-related technologies to the export administration regulations’ commerce control list, said a Thursday notice in the Federal Register. The additions stem from changes made to the Wassenaar Arrangement’s list of dual-use goods and technologies agreed to during a 2018 plenary meeting, BIS said. The changes add “recently developed or developing technologies” that are “essential” to U.S. national security: “discrete microwave transistors,” “continuity of operation software,” “post-quantum cryptography,” “underwater transducers designed to operate as hydrophones” and “air-launch platforms.” The changes took effect Thursday. Shipments “on dock for loading, on lighter, laden aboard an exporting carrier, or en route aboard a carrier” to a foreign destination on or before Thursday may proceed to the destination.

The Office of the U.S. Trade Representative launches a product exclusion process for the third tranche of tariffed Chinese goods "on or around June 30," the agency said in Tuesday's Federal Register. USTR requested OMB expedited approval for an information collection for the exclusion process that was announced as part of a May 10 tariff increase (see 1905070036).