President Donald Trump Wednesday handed down a long-awaited executive order addressing use of technologies by foreign companies in U.S. communications networks (see 1812270037). The Commerce Department is to issue interim regulations in 150 days and will seek comment, administration officials told reporters. Speaking on condition they not be identified, they stressed that the order is “country agnostic” and doesn’t specifically address Chinese telecom equipment manufacturer Huawei or the Chinese government.
Some smartphones and TVs from China imported to the U.S. under the 8528.72.64 Harmonized Tariff Schedule are on the list of goods the U.S. will subject to 25 percent duties, as are a broad assortment of other consumer tech goods, said an Office of U.S. Trade Representative notice Monday. The $300 billion in goods on the list (see 1905130022) are the biggest tranche of the four so far and represent virtually all of the remaining Chinese imports not previously dutied. A single day of public hearings on the proposed duties is set for June 17. The notice appears to be flexible on scheduling additional days of hearings. Roughly 350 witnesses testified on the List 3 tariffs in hearings that spanned six days in late August. June 10 is the due date for filing requests in docket USTR-2019-0004 at regulations.gov to appear at the hearing and place in the record a summary of expected testimony at the public hearing. Written comments are due June 17. Smartphones are the largest of eight classifications of consumer tech products that would bear the biggest brunt of the penalties, CTA Vice President-International Trade Sage Chandler emailed us Tuesday. “The import values of the products that hit our members are massive.” The customs value of smartphones imported from China last year under the HTS 8517.12.00 subheading exceeded $44.8 billion, said Chandler. Laptops and tablets imported under HTS 8471.30.01 were the next biggest category germane to CTA members, she said, worth $38.7 billion. The broad assortment of goods imported under HTS 8517.62.00 was worth $23.9 billion in 2018 customs value, she said, with smart speakers, Bluetooth headphones, smartwatches and fitness trackers included. Current tariffs have “hurt consumers, rattled supply chains for U.S. manufacturers and businesses, and created uncertainty across economies,” said Naomi Wilson, Information Technology Industry Council senior policy director-Asia. “Additional tariffs threaten to needlessly escalate this conflict.” On the big hit smartphones stand to take should the tariffs go through, CTIA declined comment for now. It may have something to say “in coming days as we discuss further with members,” emailed a spokesperson. AT&T, T-Mobile and Verizon didn’t comment, nor did Apple or Samsung.
U.S. importers whose Chinese goods were on the water when the List 3 Section 301 tariffs went up to 25 percent early Friday can assign their goods a special new 9903.88.09 heading on the Harmonized Tariff Schedule to enter at the old 10 percent duty rate, said the U.S. Trade Representative Thursday night. This obviates importers needing to pay the 25 percent duty at ports of entry and then seek refunds, under Customs and Border Protection's “in the meantime” guidance earlier Thursday (see report in the May 10 issue). Goods bearing the special HTS heading need to enter the U.S. on or before June 1 to qualify, said USTR. CBP will issue “instructions on entry guidance and implementation,” it said.
For Chinese goods already on their way to the U.S., 25 percent tariffs on $200 billion of Chinese goods that were to have taken effect at 12:01 a.m. Friday (see 1905060028), "the 10 percent duty rate will still apply," said Customs and Border Protection in updated "guidance" Thursday. That was in keeping with Office of the U.S. Trade Representative instructions a day earlier. CBP's new guidance was to correct the agency's errant system update tariffing all Chinese goods at 25 percent if they entered U.S. ports after 12:01 a.m. Friday, regardless of when they left China, in direct contradiction to USTR's instructions, blogged trade lawyer Paula Connelly Thursday. The discrepancy was likely causing "quite a bit of confusion," she said. USTR soon will publish the terms of this List 3 exclusion process, said Thursday's Federal Register notice making the tariff increase legally binding. U.S. importers “should move quickly to assess the impact" of the higher duty rate and "consider whether to prepare an exclusion request,” advised Covington & Burling Wednesday.
House Intellectual Property Subcommittee Chairman Hank Johnson, D-Ga., is crafting legislation designed to combat frivolous trademark applications, a growing issue with Chinese companies. “We’re exploring specific ideas now, and we’ll be drafting the legislation at some point in the near future,” Johnson told us after a subcommittee hearing Thursday. It featured Patent and Trademark Office Director Andrei Iancu.
Tech and other groups are concerned that President Donald Trump’s threat to hike by 150 percent -- to 25 percent -- tariffs on $200 billion of Chinese products is set to take effect Friday. An Office of U.S. Trade Representative notice set for publication in Thursday’s Federal Register mandates that the rate hike will take effect 12:01 a.m. EDT Friday, turning Trump’s tweet (see 1905060028) into the force of law. USTR Robert Lighthizer ordered the rate hike at Trump’s direction, “in light of the lack of progress” in negotiations with the Chinese on a trade deal since March, said the notice. “In the most recent negotiations” last week in Beijing, “China has chosen to retreat from specific commitments agreed to in earlier rounds” of talks, it said. Details of a newly created exclusion process will be spelled out in a separate notice, said the document. The Telecommunications Industry Association is “greatly concerned” the administration “announced the imposition of an additional tax on imports to take effect with little advance notice,” said Cinnamon Rogers, senior vice president-government affairs. “The 25 percent duty as described will impact products essential to the functioning of our country's telecommunications networks, ultimately resulting in significant new costs for American consumers.”
The Office of U.S. Trade Representative soon will publish a Federal Register notice setting the 25 percent third tranche tariff increase (see 1905060028) to take effect 12:01 a.m. Friday, USTR Robert Lighthizer told a media briefing Monday. China confirmed Tuesday that Vice Premier Liu He will lead the delegation that travels to Washington for the 11th round of U.S. trade talks opening Thursday. China regards it as “natural to have differences in a negotiation,” a Foreign Affairs Ministry spokesperson responded to Lighthizer’s allegations that the talks derailed last week in Beijing after China reneged on previously negotiated commitments. “The Chinese side will not sidestep differences and has good faith in continuing consultations,” said the spokesperson.
Industry reacted against President Donald Trump’s surprise tweets Sunday threatening to hike to 25 percent the Section 301 tariffs currently at 10 percent on $200 billion in Chinese imports, effective this Friday. The uproar overshadowed industry’s response to Trump’s accompanying threat to impose 25 percent tariffs “shortly” on $325 billion more in Chinese goods previously “untaxed.” That would cover virtually all remaining imports to the U.S. from China.
The Office of the U.S. Trade Representative included China for the 15th straight year on its priority watch list for intellectual property violations. USTR also elevated Saudi Arabia from the second-tier watch list and downgraded Canada and Colombia from priority to watch, in the annual special 301 report Thursday (see 1902080063).
Wireless Infrastructure Association names Grant Seiffert, ex-Telecommunications Industry Association, vice president-workforce development and executive director, Telecommunications Industry Registered Apprenticeship Program ... Office of the U.S. Trade Representative hires Joseph Barloon, from Skadden Arps, as general counsel, replacing Stephen Vaughn, departing ... New America Open Technology Institute promotes Sarah Morris to director, replacing Kevin Bankston, leaving to becoming Facebook director-privacy policy, effective June ... 5G America promotes Vicki Livingston to vice president-communications.