The Trump administration's threat to impose 25 percent tariffs on $50 billion worth of Chinese imports and China's possible retaliatory actions were top of mind for CTA President Gary Shapiro Wednesday at CES Asia. “The challenge with tariffs is that nobody wins, and these threats and the discussion about it causes global economic uncertainty,” he said in Shanghai. The White House announced May 29 that the Office of the U.S. Trade Representative will release its final tariffs list by Friday and the tariffs will take effect “shortly thereafter” (see 1805290046). The association disagrees with the administration’s position on tariffs, which Shapiro called “a different approach on tariffs than any in my professional life.” He believes Congress would be in opposition, too, “if they took a vote on it,” he said. Making it a point not to criticize President Donald Trump, “especially outside of U.S. soil,” Shapiro said the issue of tariffs is "potentially very dangerous, especially if you go to the next step, which is a trade war.” Meanwhile, government’s “natural reaction is to regulate,” Shapiro said. He described what he called a scary moment in Europe several weeks ago when the European commissioner responsible for privacy set his sights on regulating artificial intelligence. “I shook,” he said, over the idea of “regulating something without understanding it.” Lawmakers should attend shows like CES and CES Asia to better understand how technology helps improve lives, he said.
House Republicans went to bat for constituent tech companies trying to fend off Trade Act Section 301 tariffs of 25 percent on imports from China over intellectual property disputes. Seven GOP members from Texas want U.S. Trade Representative Robert Lighthizer to heed “requests” of Dell and Hewlett Packard Enterprise to remove Chinese imports of hard disk drives and solid state drives, said a May 18 letter posted Friday in docket USTR-2018-0005. Ted Poe, Pete Sessions, Mac Thornberry, John Carter, Roger Williams, Lamar Smith and Bill Flores said the devices are “critical components, and major cost drivers” for the “cutting edge” servers and storage products Dell and HPE make in the U.S. Cree in the past decade invested $2.3 billion in R&D and capital expenditures in Durham, said Rep. George Holding, R-N.C., so tariffs on its LED imports from China would help non-U.S. rivals. The White House announced May 29 the USTR’s office will release its final tariffs list by Friday (see 1805290046).
U.S. Trade Representative Robert Lighthizer should “do everything possible” to address China’s allegedly unfair trade practices without “imposing tariffs” or enacting measures that “might harm large numbers" of U.S. workers, consumers and businesses, said a Wednesday letter signed by 34 House Democrats and Republicans and released Thursday. The letter to Lighthizer comes before the USTR's office releases its final list of duties by June 15 and a day after the White House announced its decision to proceed with the tariffs on Chinese imports (see 1805290046).
New “trade taxes” will “increase consumer prices, decrease jobs and weaken the US economy,” tweeted CTA President Gary Shapiro Tuesday, hours after the White House announced it will go through with 25 percent tariffs on Chinese imports after the Office of the U.S. Trade Representative releases its final tariffs list by June 15 (see 1805290046). CTA otherwise was silent on the Trump administration's decision to proceed with tariffs, while other tech groups denounced it. CTA "remains opposed" to the use of tariffs to address the "imbalance" in the U.S.-China trade relationship "because of the high likelihood of short- and long-term negative consequences to our own economy and to our member companies," it testified May 16 at a USTR hearing (see 1805160020).
Much of the tech industry -- though CTA was silent -- blasted the Trump administration Tuesday for announcing it plans to go ahead with 25 percent Trade Act Section 301 tariffs on $50 billion worth of Chinese imports. The products affected won’t be known until the U.S. Trade Representative's office releases its final tariffs list by June 15. Tariffs will be imposed “shortly thereafter,” said the White House.
CTA, the National Retail Federation and 50 other trade groups from various industries want the U.S. Trade Representative’s office to “immediately make public” the details of the Trade Act Section 301 "process" it will use to add more Chinese-sourced products to the proposed 25 percent tariffs list, if it heeds the suggestions of "several stakeholders” to do so, they said in comments posted Thursday in docket USTR-2018-0005. “We strongly believe there needs to be additional public input for any products that USTR is considering adding to the proposed list,” said the comments, which also were signed by the Information Technology Industry Council, the Internet Association and the Telecommunications Industry Association.
A bipartisan group of senators, led by the No. 2 in Republican leadership, asked the treasury secretary, commerce secretary and U.S. trade representative not to loosen export controls for China as they consider how to narrow the bilateral trade deficit. The letter, sent Tuesday, said loosening export controls on sensitive technology "would bolster China’s aggressive military modernization and significantly undermine long-term U.S. national security interests." In addition to Sen. John Cornyn, R-Texas, Sen. John Thune, R-N.D., and Minority Leader Chuck Schumer, 13 Republicans, 13 Democrats and Independent Sen. Angus King of Maine signed the letter. The missive brings up possible softening of sanctions on ZTE: "We urge you not to compromise lawful U.S. enforcement actions against serial and pre-meditated violators of U.S. law, such as ZTE. Export control and sanctions laws should not be negotiable, because fidelity to the rule of law is a key part of what distinguishes the U.S. from a country like China that is ruled by a Communist dictatorship." On Capitol Hill, anti-ZTE efforts moved forward (see 1805230058).
Proposed new 25 percent tariffs on products from China will be put "on hold" while the Trump administration tries to "execute the framework" of a trade deal with China, Treasury Secretary Steven Mnuchin said in an interview on Fox News Sunday. "I'm pleased to report that we've made very meaningful progress and we've agreed on a framework, which is important to understand, and the framework includes their agreement to substantially reduce the trade deficit by increasing their purchasing of goods," he said of the talks with the Chinese. China and the U.S. released a joint statement Saturday saying both sides are aligned on the "importance of intellectual property protections, and agreed to strengthen cooperation," among other terms. Comments are due Tuesday in docket USTR-2018-0005 to rebut statements made in three days of hearings the U.S. Trade Representative's office held last week on the proposed tariffs (see 1805160067 or 1805160020). USTR Robert Lighthizer wants "real work" for "changes in a Chinese system that facilitates forced technology transfers in order to do business in China and the theft of our companies’ intellectual property and business know how," he said in a statement his office emailed us Monday. "Getting China to open its market to more U.S. exports is significant, but the far more important issues revolve around forced technology transfers, cyber theft and the protection of our innovation. As this process continues the U.S. may use all of its legal tools to protect our technology through tariffs, investment restrictions and export regulations. Real structural change is necessary." Despite the Trump administration's pause in adding tariffs on goods from China, it's too early to end efforts on product exemptions, Baker McKenzie lawyer Ted Murphy blogged. "While this is a positive development, it is also subject to change," he said. "For now, we are recommending that companies continue to pursue exclusions just in case."
CTA "remains opposed" to the use of tariffs to address the "imbalance" in the U.S.-China trade "because of the high likelihood of short- and long-term negative consequences," said Sage Chandler, vice president-international trade, in written testimony sent to us Wednesday on the second day of hearings (see 1805150074) before the U.S. Trade Representative’s office on proposed 25 percent tariffs. Some members, "including innovative startups," fear this would "put them at a disadvantage relative to their competitors in other nations," she said. Prices will rise an average of 23 percent on TVs and other consumer products if the proposed tariffs for Chinese intellectual property issues are imposed, said David French, National Retail Federation senior vice president-government affairs, in written testimony Wednesday. The Internet Association appreciates the administration “is trying to address” the “trade barriers” that block U.S. internet services from penetrating China, depriving them of “billions of dollars in potential business,” testified Jordan Haas, director-trade and international policy, Wednesday. “Tariffs, however, are the wrong solution.” Internet companies “understand that tariffs are hidden, regressive taxes that will be paid by the U.S. consumer in the form of higher product prices and by hurting companies’ ability to invest in future technology,” he said. Many of the products on the proposed tariff list are consumer goods, including TVs, and tariffs on them would be “problematic for internet companies,” so they should be removed, said Haas. The National Electrical Manufacturers Association agrees the levies "will not help support and could materially injure the global competitiveness of our industries," said Kyle Pitsor, vice president-government relations, in written testimony Wednesday.
A wide range of industries asked to be spared -- or protected -- in the first day of a U.S. Trade Representative office hearing on the proposed Chinese tariffs that to include more than 120 companies, a major union and many trade associations in sessions that run through Thursday. The agency will refine the list of products subject to 25 percent tariffs over China's alleged unfair trade practices. In testimony through Tuesday, Best Buy and Roku were among many opposing full-on IP tariffs. Mike Mohan, chief merchandise officer at Best Buy, dismissed the argument of General Counsel David Baer of TV maker Element Electronics, which supports keeping the proposed tariffs on finished TV sets from China. Tariffs could raise retail prices as much as 23 percent, Mohan said. Chas Smith of Roku, which employs 800 of its 900 worldwide employees in the U.S., said if fewer TVs are bought because of price increases from the tariffs, that will harm its ability to add more users. That won't just cut licensing fees from its Chinese manufacturing partners but also advertising and content distribution revenue, the hearing was told.