Consumer Technology Association Says Members Identified 302 Tariff Lines They Want Excluded From 10% Duties

The U.S. trade relationship with China "significantly impacts” Consumer Technology Association member companies, large and small, because they “rely on the global supply chain -- including China -- to conduct business,” said Sage Chandler, CTA vice president-international trade. She asked to appear at Aug. 20-23 public hearings to oppose 10 percent Section 301 tariffs proposed in a July 10 Office of the U.S. Trade Representative notice. CTA members identified 302 tariff lines of Chinese imports in the notice, accounting for more than $109 billion in value, for which 10 percent duties “would be detrimental to their business,” Chandler said in her July 27 filing. CTA is still gathering “relevant data” on the tariffs’ possible impact on members, and the numbers she cited may need to be “updated” by the time written comments are due Aug. 17, she said.

The list of Harmonized Tariff Schedule codes that most worry CTA members includes products that “impact small companies” manufacturing in the U.S. and startups using U.S. intellectual property, research, design and engineering, Chandler said. Unless removed from tariff consideration, duties on those products would cause “substantial” harm to the entire Internet of Things “ecosystem,” hurting “U.S. innovation, small and medium size businesses, and the consumer,” she said.

What spooks Chandler most is a “single line item,” HTS 8517.62.00, listed in the notice as covering machines for the reception, conversion and transmission or regeneration of voice, images or other data, she told us. That’s the line item that “captures servers, gateways, modems,” plus “Bluetooth-enabled devices, like headsets, speakers, fitness trackers, smart health devices and watches and things like that,” she said.

On first impression, Chandler thought to herself, ‘Well, that stinks for the speaker guys and the fitness-tracker folks,’” she told us. But then she realized that the one line item exposes to tariffs “basically the entire ecosystem of the internet,” she said. “You’re looking at what potentially could be pass-down costs everywhere along the chain for the Internet of Things,” she said.

From the perspective of the CTA member companies that Chandler described in her filing, the tariff lines she listed for proposed exclusions included products ranging from the obvious (HTS 8518.50.00, electric sound amplifier sets; and HTS 8518.90.60, printed circuit assemblies) to the practical (HTS 8204.11.00, hand-operated nonadjustable spanners and wrenches) to the not so obvious (HTS 3304.99.50, beauty or makeup preparations, including sunscreen products).

As with the first two rounds of proposed or enacted 25 percent tariffs, CTA members “remain concerned” that the new 10 percent duties 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 in her filing. They also worry the tariffs will “increase the costs of technology products used by U.S. businesses, workers, and consumers across every sector,” she said.

CTA “appreciates” that the Trump administration “removed some items from its original list of proposed tariffs about which CTA had commented” (see 1806150003), Chandler said. But as CTA said in its “earlier submissions and testimony,” it “remains opposed to the use of tariffs to address inequity in the trade relationship with China because of potential long-term negative consequences to our own economy,” she said.