The Trump administration should pursue a “plurilateral agreement among the world’s largest economies” to curb China’s allegedly unfair trade practices, commented IBM in docket USTR-2018-0026 in opposition to the third tranche of Section 301 tariffs on Chinese imports. IBM thinks that a global agreement with China’s “largest trade and investment partners” could help “establish broad new norms,” it said.
International Trade Today is providing readers with some of the top stories for Sept. 4-7 in case they were missed.
The Information Technology Industry Council, like the Consumer Technology Association (see 1809070025), questions whether President Donald Trump's proposed third tranche of 25 percent Section 301 tariffs on $200 billion worth of Chinese imports "is legal" under the 1974 Trade Act, spokesman Jose Castaneda said in a Sept. 10 email. ITI has made no “final decision” whether to pursue “litigation” against the administration to block the tariffs from taking effect, he said.
The Consumer Technology Association is considering a lawsuit to challenge the proposed tariffs on $200 billion worth of goods from China under Section 301, the trade group said in a news release. “We are reviewing all options,” emailed spokeswoman Izzy Santa when asked if CTA will sue to block the levies. CTA's comments "detail how these tariffs may be vulnerable to a legal challenge because they are not based on the required legal finding of unfair business practices by China, and instead are retaliatory in nature and require a separate Section 301 investigation, which USTR did not conduct," it said. Gary Shapiro, CTA's CEO, said "we are skeptical the $200 billion tariffs will be upheld in court if challenged."
China is a bigger problem than Canada, President Donald Trump told reporters Sept. 7 on Air Force One, and said he has tariffs ready to go on all the other Chinese products that have not faced additional tariffs in the trade war thus far. "Nobody has ever done what I’ve done. The $200 billion we’re talking about, could take place very soon, depending what happens with them," he said, referring to the third tranche of Chinese goods subject to Section 301 tariffs (see 1807110050), whose comment period ended Sept. 6. "And I hate to say that, but behind that, there’s another $267 billion ready to go on short notice, if I want. That totally changes the equation," he said, according to various media reports.
Continuing the “tit-for-tat tariff escalation” with China by enacting a third tranche of proposed Section 301 duties on $200 billion worth of Chinese imports “only serves to expand the harm to more U.S. economic interests, including farmers, families, businesses, and workers,” wrote the National Customs Brokers & Forwarders Association of America, the National Retail Federation and 148 other trade groups in a letter to U.S. Trade Representative Robert Lighthizer at the Sept. 6 deadline for comments in docket USTR-2018-0026. “Unilaterally imposing tariffs on hundreds of billions of dollars in goods invites retaliation,” said the groups, which also included the National Association of Foreign-Trade Zones, the American Association of Exporters and Importers, the Information Technology Industry Council and the Telecommunications Industry Association. Implementing the first two rounds of tariffs July 6 and Aug. 23 “has not resulted in meaningful negotiations or concessions” from the Chinese, they said.
The Trump administration’s proposed Section 301 tariffs on a third tranche of Chinese goods worth about $200 billion in customs value “would target many key components that make cloud computing possible,” the Information Technology and Innovation Foundation reported on Sept. 4. The administration “in theory” initiated the tariffs to “counteract unfair Chinese trade practices and improve U.S. competitiveness,” ITIF said. “But their practical effect would be to advantage foreign technology competitors, thereby threatening U.S. leadership in both the adoption and provision of cloud computing, and stunting U.S. economic growth,” it said. Though “contesting Chinese innovation mercantilism” is a “laudable and necessary mission,” the administration needs to “seek alternative policy measures that do not raise the cost of key productivity -- and innovation-enhancing capital goods and services such as information technology and cloud computing,” it said. ITIF fears that tariffs would raise prices for businesses and consumers and force cloud-service providers to cut costs through job reductions or curtail spending on new data centers or the research and development “needed to stay ahead of international competitors,” it said. It also worries that cloud providers “may be forced to invest elsewhere to remain competitive,” it said. Tariffs also “threaten to disrupt finely crafted global supply chains for the manufacture of information-technology products,” it said. Those supply chains can’t “easily be reinvented in the short term without significant detriment to, and dislocation of, U.S. industry,” it said.
Though the vast majority of the nearly 3,000 comments in docket USTR-2018-0026 opposed a third tranche of Section 301 tariffs on Chinese goods, Veeco Instruments supports the proposed duties on “indicator panels incorporating LCDs or LEDs” imported from China under the Harmonized Tariff Schedule’s 8531.20.00 subheading, the company said in Aug. 30 comments posted in the docket. Veeco also wants U.S. Trade Representative Robert Lighthizer to impose duties on six more tariffs lines of LED-related goods not currently proposed in the third tranche, the company said in a document heavily redacted to hide “business confidential” information. The eight-page document also contained roughly two dozen redactions to hide Veeco's identity, except for one reference by name to Veeco that apparently slipped through. A revised document later posted in the docket deleted that one Veeco reference and replaced the previous document, which is now listed in the docket as "restricted to show metadata only because it contains confidential business information data." The publicly traded Veeco did about $485 million in 2017 revenue, mainly through the sales of semiconductor process equipment used to produce LEDs and other components, said the company’s most recent 10-K at the Securities and Exchange Commission. Imposing tariffs on LEDs and products containing them will “ensure that Chinese producers” positioned to manufacture those products “will not benefit from having unfettered access to the U.S. market,” Veeco said. The tariffs also “will encourage U.S. consumers to purchase such products from other sources that do not rely on stolen intellectual property to make these products,” it said. Luke Meisner, the Schagrin Associates lawyer who filed the comments on his client’s behalf, declined to comment.
International Trade Today is providing readers with some of the top stories for Aug. 27-31 in case they were missed.
No records exist at the Office of the U.S. Trade Representative explaining how and why the agency removed finished TVs from China from the first tranche of Section 301 tariffs imposed July 6 (see 1806150003), USTR said in an email on Aug. 30. A Freedom of Information Act request submitted Aug. 6 asked for copies of all emails, reports and any other physical or electronic documentation shared among the 17 members of the interagency Section 301 committee charged with deciding which tariffs would stay and which would go from the list released April 6. The request, submitted by a sister publication to International Trade Today, sought documents that would shed light on the deliberations among the committee members that led the agency to spare TVs from the 25 percent tariffs. The agency did an automated search of the records stash of four USTR officials who serve on the committee using an “eDiscovery tool,” and also did a “manual search,” but found no materials that were “responsive” to our FOIA request, it said. The four officials whose records the agency said it searched included: Arthur Tsao, assistant general counsel and lead attorney in the Section 301 tariffs proceedings; Julia Howe, director-China; William Busis, deputy assistant USTR for monitoring and enforcement, and chairman of the Section 301 committee; and Terry McCartin, assistant USTR for China affairs.