Panelists at the Center for Strategic and International Studies agreed that the process to determine whether imports violate domestic companies' intellectual property works well, but said once an exclusion order is issued by the International Trade Commission, enforcement can be tricky.
U.S. Trade Representative Robert Lighthizer filed a request for consultations at the World Trade Organization to “address China’s discriminatory technology licensing requirements,” his office said in a March 23 news release. President Donald Trump’s memorandum proposing Section 301 tariffs on about $60 billion worth of Chinese goods imported to the U.S. directed Lighthizer to address “China’s discriminatory technology licensing practices” through a WTO dispute proceeding (see 1803220034), of which the consultations request was the first step, Lighthizer's office said.
The Chapter 11 bankruptcy filing by Toys 'R' Us could reduce new orders of toys in the near future, said Steve Pasierb, president of The Toy Association, in a letter. "In addition to the direct negative impact on some companies, the flood of liquidation product from [Toys 'R' Us] can likely weaken sales at both mass and specialty retailers," he said. "Likewise, there will be a short-term negative influence on orders coming into our manufacturing members, at least until the ramp-up happens to stock for the 2018 holiday season." The toy industry is now "at an inflection point," he said.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, speaking at a conference hosted by free-trade interest groups, said Congress will assert itself when it's time to renew fast-track trade negotiating authority in July -- and that no changes to NAFTA can take effect unless Congress signs off. "Because the Constitution very clearly assigns to Congress the power to lay and collect tariffs and to regulate foreign commerce, Congress must have the final word on the fate of NAFTA," he said March 20, according to prepared remarks. "Congress will use the extension disapproval process under the Trade Promotion Authority law to emphasize that the administration must adhere to the TPA negotiating objectives and to encourage the president to seek new agreements with our trading partners."
Wal-Mart, Macy's, Target and 23 other retailers and apparel brands sent a letter March 19 to the White House asking that broadly applied tariffs not be part of the Section 301 solution to Chinese intellectual property theft and investment restrictions. "Families shopping in our stores pay higher prices because America already levies import taxes as much as 32 and 67 percent on basic clothes and shoes," the companies said in the letter. "Applying any additional broad-based tariff as part of a Section 301 action would worsen this inequity and punish American working families with higher prices on household basics like clothing, shoes, electronics, and home goods.... As you continue to investigate harmful technology and intellectual property practices, we ask that any remedy carefully consider the impact on consumer prices."
International Trade Today is providing readers with some of the top stories for March 12-16 in case they were missed.
Tariffs are a tax on consumers, and not the right way to address China's industrial policies and unfair trade practices, the U.S. Chamber of Commerce says. U.S. Chamber CEO Thomas Donohue said March 15 that sweeping tariffs against China "could lead to a destructive trade war with serious consequences for U.S. economic growth and job creation. The livelihood of America’s consumers, businesses, farmers, and ranchers are at risk if the administration proceeds with this plan." Administration officials say the Section 301 technology transfer and intellectual property investigation response will be released in the coming weeks.
Despite the recent attention on Section 232 tariffs, some expect the effects of the Section 301 investigation started last year (see 1708210024) to eclipse the steel and aluminum import restrictions, panelists said at a Washington International Trade Association event March 13. Wendy Cutler, a former acting deputy U.S. trade representative, said once the White House announces what it's doing to respond to China's intellectual property transgressions, "we won't be talking about steel and aluminum."
Senate Majority Leader Mitch McConnell broke his silence on steel and aluminum tariffs, which have sparked strong reactions from Republicans in both chambers since the surprise announcement last week (see 1803010029). "There is a lot of concern among Republican senators that this could metastasize into a larger trade war, and many of our members are discussing with the administration just how broad, how sweeping this might be," he said at a news conference March 6. He noted that President Donald Trump has suggested an exemption for Canada and Mexico might be tied to concessions in NAFTA renegotiations. "From a Kentucky point of view, NAFTA's been a big one, we've benefited from it in every way," the senator from Kentucky added. McConnell said that if the tariffs create disruption, "it could send our economy in the wrong direction."
The Office of the U.S. Trade Representative on Jan. 12 released the results of its Section 301 review of notorious markets, it said in a press release. The report lists “25 online markets and 18 physical markets around the world that are reported to be engaging in and facilitating substantial copyright piracy and trademark counterfeiting,” USTR said. The list “maintains its special focus on the distribution of pirated content and counterfeit goods online. This year, the report highlights illicit streaming devices as an emerging piracy model of growing concern,” it said. “The report also calls on several e-commerce platforms to improve takedown procedures, proactive measures, and cooperation with right holders -- particularly small and medium-sized businesses -- to decrease the volume and prevalence of counterfeit and pirated goods on their platforms.”