There's no true TV manufacturing in the U.S., so TVs don't belong on a list of products targeted for 25 percent tariffs designed to hurt Chinese producers without harming end U.S. consumers, representatives of Best Buy and TCL said Tuesday. They were among a wide range of companies and industries asking to be spared -- or protected -- in the first of three days of U.S. Trade Representative's office hearings that will listen to testimony from more than 120 companies, a major union and many trade associations. The USTR's office will refine the list of products subject to 25 percent tariffs over China's intellectual property issues on what amounted to $50 billion in imports last year. "Assembling is not manufacturing," said Jonathan King, vice president-legal affairs at TCL's North American subsidiary. The idea that a domestic TV production industry could quickly emerge here isn't feasible, he said. His remarks were in apparent reference to Element Electronics, whose general counsel, David Baer, testified later Tuesday that his company assembles LCD TVs in a plant in Winnsboro, South Carolina, and has been doing so since 2014. Element supports the USTR's inclusion of finished flat-panel TVs from China on the tariff list, though it wants LCD panels, which Element sources from China, left off, he said. Element pays a 4.5 percent duty on LCD panels imported from China. That leaves Element at an unfair advantage because finished TVs imported from China bear a lower 3.9 percent royalty and finished sets imported from Mexico carry no duty at all under the North American Free Trade Agreement, he said. Baer said the USTR needs to look beyond China, as Chinese factories are already shipping subassemblies to Thailand and Vietnam, which haven't previously made TVs, and to Mexico, which does. If the government doesn't stop that shift in production among companies seeking the circumvent the tariffs, the agency's Section 301 remedies "would be a toothless tiger," he said. Element made many of those same points in comments it filed Friday in docket USTR-2018-0005 (see 1805140040). Mike Mohan, chief merchandise officer at Best Buy, dismissed Baer's arguments. Tariffs could raise retail TV prices as much as 23 percent, affecting those at the lower end of the market who shop smaller screens the most, he said. Best Buy sources virtually all its private-label Insignia-brand TVs from China (see 1804040023).

Though there's “no good time” for higher tariffs on Chinese imports to take effect, and if the Trump administration decides to impose them after the public comment process concludes at the end of May, “there is significant risk for these proposed tariffs to hit American families at the worst time of year -- back-to-school and holiday season.” So said the Retail Industry Leaders Association in comments posted Monday in docket USTR-2018-0005. “The ripple effect this would have to the U.S. economy could ruin holidays for American families across this country,” said the trade group, which represents big-box retailers in multiple industries, including Best Buy, Costco, Target and Walmart. Retailers also worry about the “lack of transparency” if the U.S. Trade Representative’s office decides to add new product line items to its tariffs list without “the opportunity to comment,” it said. “It is critical to provide the opportunity for the public to comment on a final list before it is to take effect, particularly for any new products that may be added.”

The U.S. Trade Representative’s proposed 25 percent tariffs on Chinese imports and the Trump administration’s “escalating” threats to raise the tariffs even higher “will not effectively advance our shared goal” of changing China’s “harmful” trade practices “in a durable, verifiable, and enforceable manner.” So said joint comments filed Friday in docket USTR-2018-0005 by dozens of business and consumer tech trade groups, including CTA, the Information Technology Industry Council, the National Retail Federation and Telecommunications Industry Association. “We believe the proposed tariffs will be counterproductive and undermine” the administration’s efforts “to change China’s policies and practices” through face-to-face negotiations, said the groups. “Tariffs are taxes,” they said. “Imposing wide-ranging tariffs will negate the economic and jobs benefits of the recent tax reform and tax cuts by offsetting those benefits with the costs embedded in the tariffs. These costs will be paid by the U.S. consumer in the form of higher product prices and by U.S. businesses in the form of higher costs.” Though the tariffs haven't taken effect, “the very discussion” of them creates “uncertainty across the U.S. business and farm community,” and “already harmed U.S. companies, farmers, consumers, and markets,” said the groups. “China’s threat of retaliation further exacerbates business and farm uncertainty.” The groups understand the tariff threat “is intended to create leverage to change the direction of the Chinese economy, but that provides little comfort to those businesses, farms, and workers whose livelihoods are being put at risk.” CTA also filed its own 28-page comments submission Friday in which it said it “categorically opposes the imposition of tariffs on the products identified in USTR’s proposed list.” CTA specific comments on 193 "line items" on the list, asking that they be removed because tariffs on them would "cause disproportionate harm to our member companies."

Customs and Border Protection will launch a two-to-four-week pilot program on blockchain technology this fall related to North American Free Trade Agreement and Central America Free Trade Agreement certificate of origin processes, a CBP spokesman said. CBP needs to reach further back into the supply chain than just the exporter and can "message multiple partners via blockchain at the same time," he said. The agency and the Department of Homeland Security's Science and Technology Directorate will examine how much the blockchain system reduces duplicative data and whether multiple blockchain programs can communicate simultaneously. The pilot also has a goal of evaluating "the usefulness of blockchain for a law enforcement agency," the spokesman said. Advisory committee members (see 1708250025) helped to choose this pilot subject.

U.S. companies are “market leaders” in development and sale of smart thermostats, and would be the hardest hit if the Trump administration imposes 25 percent tariffs on Chinese imports of component parts (see 1804050005), said the Advanced Energy Management Alliance in comments posted Thursday in docket USTR-2018-0005. The alliance, whose members include green energy services providers, but also Nest, Tesla and Walmart, wants the U.S. Trade Representative’s office to remove automatic thermostats (Harmonized Tariff Schedule subheading 9032.10.00) from its list of products targeted for the tariffs, it said. Chinese companies “do not have a meaningful presence in the U.S. market” for smart thermostats, it said. “Therefore, if USTR were to impose duties on smart thermostats, the impact of the duties would fall primarily on U.S. companies. In addition to the harm this would cause to the U.S. companies and their American workers, the additional duties would increase prices for the millions of U.S. families who rely on smart thermostats to control their energy costs and [would] discourage their use.” The tariffs also would harm the “small and medium-sized U.S. businesses that sell and install thermostats,” and would “disrupt the efforts that utility companies and others have undertaken to use technologically advanced smart thermostats to meet energy efficiency targets,” said the alliance. The tariffs also would “undermine U.S. innovation in this space,” it said. The alliance thinks it’s “unlikely” tariffs would be “practicable or effective” in eliminating unfair Chinese acts, policies and trade practices the USTR’s office is targeting, “because the market leaders in this product category are U.S. and other non-Chinese companies,” it said. Comments are due Friday, and a hearing on the proposed tariffs is scheduled for Tuesday. The deadline for comments to rebut statements made at the hearing is May 22.

Imports at major U.S. retail container ports are expected to grow “steadily” throughout the summer despite the Trump administration’s threat to impose 25 percent tariffs on goods from China (see 1804040023), said the National Retail Federation Wednesday in its monthly port-tracker report. “With proposed tariffs yet to be officially imposed, retailers are stocking up on merchandise that could soon cost considerably more,” said NRF. “If tariffs do take effect, there’s no quick or easy way to switch where these products come from.” U.S. ports handled 1.54 million 20-foot-long cargo containers or their equivalents in March, said NRF. Though that was down 8.6 percent from February and 0.7 percent lower year over year, April was estimated at 1.73 million containers, a 6.4 percent increase from the same month a year earlier. NRF also is forecasting monthly increases through September, including the possibility of record imports in July and August. The first half of 2018 is expected to total 10.4 million containers, an increase of 5.8 percent over the first half of 2017.

The Department of Homeland can identify how blockchain technology could help secure data and enhance national security, Senate Oversight Subcommittee Chairman Ralph Abraham, R-La., said Tuesday during a joint hearing with the Research and Technology Subcommittee (see 1805030028). Counterfeit and pirated goods are projected to account for $4.2 trillion of the global economy by 2022, said Research and Technology Chairwoman Barbara Comstock, R-Va. She said consumers have the right to “feel confident to have found a deal that is a bargain and not a counterfeit product.” DHS Cyber Security Division Director Douglas Maughan called for “strong working relationships with industry” to ensure government “applications of blockchain and distributed ledger technology are effective and trusted.” The U.S. should work with foreign partners to establish an international regulatory framework for blockchain technology to foster innovation and ensure the free flow of goods, said UPS Vice President-Global Customs Brokerage Staff Chris Rubio.

Customs and Border Protection is considering offering trusted trader benefits to those in the e-commerce world, to improve compliance, said John Leonard, CBP executive director-trade policy and programs, on a panel last week at the National Customs Brokers & Forwarders Association of America annual conference. The hope is to "incentivize all these new actors in this space to improve the platforms and marketplaces, etc., to be more compliant," he said in Rancho Mirage, California. The agency will need to act quickly on an e-commerce policy "because it's already overtaking us," said Jim Swanson, association director-cargo and conveyance security and controls.

South Dakota-based Daktronics, which bills itself as the “global leader” in manufacturing LED display systems for large-screen digital signage, wants the U.S. Trade Representative to impose 25 percent tariffs on imports of Chinese LED display screens and “the main assemblies” of LED panels and modules, said the company in a March 23 letter to Sen. John Thune, R-S.D., which Thune forwarded to the USTR’s office. The letter posted Friday in docket USTR-2018-0005 predated by about two weeks release of the USTR’s list of products targeted for the tariffs. The list included LEDs and LED-related components but not LED display screens or modules. In the past decade, “we have seen increasing unfair competition from Chinese imports and a decrease in USA manufacturers,” said Daktronics. U.S.-based manufacturers of “complete video display systems” number only about five companies, but in China, “there are several thousand,” it said. “This seemingly government-backed excess capacity in China drives the product prices down and makes it feasible to import their products into the USA,” but at “artificially low prices,” and of questionable quality, it said. The tariffs would benefit U.S. display makers because “our investments in Development and Capacity stay here in the USA,” it said. “We need to move quickly, there aren't many of us left!” Thune asked the USTR’s office to “give careful consideration to the proposed tariffs set out in the company's letter.” Comments on the proposed tariffs are due Friday as a prelude to a May 15 hearing.

Comments are due June 1, replies July 2 on an FCC national security NPRM in docket 18-89, said a proposed rule in Wednesday's Federal Register. The NPRM adopted April 17 proposes to bar the use of money in any USF program to buy equipment or services from companies that “pose a national security threat” to U.S. communications networks or the communications supply chain (see 1804170038). It also explores broader related issues (see 1804180053).