Tech Trade Group Weighing 'Litigation' to Block Tariffs, Says No 'Final Decision' Made

The Information Technology Industry Council, like the Consumer Technology Association (see 1809070025), questions whether President Donald Trump's proposed third tranche of 25 percent Section 301 tariffs on $200 billion worth of Chinese imports "is legal" under the 1974 Trade Act, spokesman Jose Castaneda said in a Sept. 10 email. ITI has made no “final decision” whether to pursue “litigation” against the administration to block the tariffs from taking effect, he said.

The National Retail Federation, which has coordinated its tariffs opposition with CTA through joint surveys and filings, appears not ready just yet to join in on a legal challenge if CTA mounts one. Though NRF "has been very active" on the tariffs issue, the legal "angle is one we haven’t weighed in on yet," spokeswoman Bethany Aronhalt emailed.

Timing will be critical for a complaint seeking injunctive relief to be filed before the new tariffs take effect. CTA commented its member companies worry an administration order imposing the tariffs would be released soon after the comments period expires. The administration in the first two rounds of tariffs gave no consistent clues when a third might be implemented. It took the administration 24 days after comments were closed on the first tranche to release its order putting the tariffs into effect three weeks later on July 6. Only a week passed for release of the order on the second round of tariffs, which took effect 16 days later on Aug. 23.

Comments filed by the Sept. 6 deadline kept pouring in to docket USTR-2018-0026 from various tech interests, virtually all opposing the tariffs. LG Display America runs a repair center in Carlsbad, California, for defective TV parts and liquid crystal display (LCD) and light-emitting diode (OLED) panels, the subsidiary said. The goods it can’t repair “are replaced with buffer products imported from South Korea and China,” including parts and components that would be subject to new tariffs under two classifications of imports, it said. It fears that the tariffs will increase its repair services fees, hurt sales and threaten jobs.

Apple, which previously was silent through three rounds of tariffs, worries the proposed duties will “increase the cost of our U.S. operations, divert our resources, and disadvantage Apple compared to foreign competitors,” the company commented. Tariffs would harm the Apple Watch, it said. The device maker finds it “difficult to see how tariffs that hurt U.S. companies and U.S. consumers will advance the Government’s objectives with respect to China’s technology policies.”

Next-generation technologies “are critically important to maintain U.S. industrial competitiveness for years to come,” Intel commented. To implement 5G, America’s public and private sectors “will need to make major investments in modernizing their digital infrastructure,” it said. “Taxing the network equipment composed of many computing and communication devices needed to deliver the 5G benefits,” as the tariffs will do, “will slow down the pace of technology adoption across the U.S. economy, causing American firms and institutions to fall behind foreign competitors outside of China that are not subject to the same tariffs,” it said.