Trade Groups Ask to Appear at USTR Hearing to Oppose New Round of Tariffs

The Consumer Technology Association, the National Retail Federation and the Semiconductor Industry Association are among groups and companies requesting to appear at a July 24 Office of the U.S. Trade Representative hearing about the Section 301 tariffs on a second list of 284 lines of Chinese-sourced products proposed for the higher duties (see 1806210029). The Retail Industry Leaders Association and the National Association of Foreign-Trade Zones are also among the commenters in docket USTR-2018-0018. Written comments are due July 23, and post-hearing rebuttal comments, July 31.

CTA members “have so far identified” at least 22 Harmonized Tariff Schedule codes on the new list covering $6.6 billion worth of products they imported from China in 2017, said Sage Chandler, CTA vice president-international trade. “Members have reported concerns on the impact of tariffs on their supply chains and their ability to deliver the quality products desired by U.S. consumers.” Members “remain concerned” the new tariffs will “put their businesses at a disadvantage relative to their competitors in other nations who can continue importing critical components from China at a fraction of the cost,” Chandler said. Members worry the tariffs will “raise the cost of living for most Americans, particularly given the enhanced risk of the application of retaliatory tariffs by China,” she said.

NAFTZ President Erik Autor said his testimony would have a similar focus as his testimony on the first proposed list of Section 301 goods (see 1805160031). Specifically, Autor said he would address the possible Section 301 duties on final products made in U.S. FTZs. "We do not think it is the intention of the United States to impose tariffs on products manufactured in the United States (as distinct from any imported components or inputs that may be subject to an order)," he said in the filing. "Presidential Proclamation language needs to follow the example in the Section 232 steel and aluminum proclamations and make this point absolutely clear in this and every trade-remedy action."

David French, NRF senior vice president-government relations, wants to testify that tariffs on the “several HTS codes” of products on the new list “will directly impact retailers and their consumers,” he said. “We are also concerned about the ongoing escalation of tariffs and the President’s call for additional tariffs if China retaliates,” French said. “Retailers cannot simply change their supply chains overnight to find alternate sources of products, if those sources even exist.”

Semiconductors are “the bedrock of the modern American economy, powering virtually everything digital from cellphones and cars to supercomputers and military systems,” said David Isaacs, SIA vice president-government affairs. Chinese companies “export almost no semiconductors to the U.S. market,” so tariffs on them would hurt American businesses, not punish the Chinese for allegedly unfair trade practices, Isaacs said. Most U.S. semiconductor imports from China "are semiconductors designed and manufactured in the United States, and then shipped to China for the final stage of semiconductor fabrication,” accounting for only 10-15 percent “of the value of the final product,” he said. “Relocating this step in the supply chain” to countries of origin other than China “would be costly, time consuming, and make our own semiconductor companies less competitive,” he said.

RILA supports “holding U.S. trading partners accountable” for allegedly unfair trade practices, but worries “about the negative impact” the proposed tariffs could have “on America’s working families,” said Hun Quach, vice president-international trade. “Punishing American working families with higher prices on household basics like clothing, shoes, electronics, and home goods is not a solution.”