This past Friday, the Office of the United States Trade Representative (USTR) released the list of Chinese goods targeted for an additional 25% tariff, marking a critical step in the Trump administration’s Section 301 probe that has investigated what it perceives to be unfair Chinese trade practices.
“We must take strong defensive actions to protect America’s leadership in technology and innovation against the unprecedented threat posed by China’s theft of our intellectual property, the forced transfer of American technology, and its cyber attacks on our computer networks,” USTR Robert Lighthizer said in a prepared statement. “China’s government is aggressively working to undermine America’s high-tech industries and our economic leadership through unfair trade practices and industrial policies like ‘Made in China 2025.’
“Technology and innovation are America’s greatest economic assets and President Trump rightfully recognizes that if we want our country to have a prosperous future, we must take a stand now to uphold fair trade and protect American competitiveness.”
The announcement comes on the heels of three days of public hearings held last month by the USTR and the Section 301 Committee, during which 121 witnesses offered testimony. In addition, more than 3,200 written submissions were sent in relation to the probe, according to the USTR release.
What is Covered in the Tariff List?
The 25% tariff covers 1,102 products in two separate tariff lines.
The first set of products, according to the USTR, includes 818 products worth approximately $34 billion. Duties will be collected on these items beginning July 6. (The full list of products in this set is available here.)
Among the metal-related products included in this list are:
- Furnaces and ovens for the roasting, melting or other heat treatment of ores, pyrites or of metals
- Converters of a kind used in metallurgy or in metal foundries
- Casting machines, of a kind used in metallurgy or in metal foundries
- Metal-rolling tube mills
- Machine tools operated by laser, for working metal
- Tools for working in the hand, pneumatic, rotary type, suitable for metal working
- Machines and mechanical appliances for treating metal, including electric wire coilwinders, nesoi
- Molds for metal or metal carbides, injection or compression types
Meanwhile, the second set comprises 284 products “identified by the interagency Section 301 Committee as benefiting from Chinese industrial policies, including the ‘Made in China 2025’ industrial policy.” (The full list of products in this set is available here.) A review and comment period on this set is forthcoming and, subsequently, a final decision from the USTR on which of these products will be subjected to the additional duty.
The products in question cover a wide range of uses, including aerospace, information and communications technology, robotics, industrial machinery, new materials, and automobiles, according to the release.
The list, however, does not include common consumer purchases, like cellphones and televisions.
Last week, China indicated it would do away with trade deals made to date with the U.S. (done with the intention of scaling back burgeoning trade tensions). In addition, it said it would respond with retaliatory tariffs should the U.S. move forward with the Section 301 duties on Chinese goods.
The U.S. launched the Section 301 investigation in August 2017 in an attempt to investigate what are perceived as unfair Chinese trade practices, particularly with reference to intellectual property theft and forced technology transfers.
The Response at Home
Scott Paul, president of the Alliance for American Manufacturing, praised the USTR decision, but said additional steps must be taken to curb the impacts of China’s alleged unfair trade practices.
“For too long, American businesses and workers have suffered devastating losses due to China’s unchecked cheating,” Paul said in a prepared statement. “These targeted tariffs are the right thing to do for our workers, our economy, and our future.
“While we support the administration’s action today, there is still much left to be done. Restricting Chinese investment, pursuing multilateral trade cases against Beijing, and defending our farmers and workers who may be unfairly targeted by Chinese retaliation must also be priorities.”
Other industries, including the domestic textiles sector, expressed support for the move, while arguing textile end products should also be included on the list of items targeted for the additional duty.
“As per our recommendation, NCTO is pleased that almost all textile machinery products were removed from the final list of tariff lines subject to immediate 301 duties because tariffs on textile machinery hinder the competitiveness of U.S. textile manufacturers,” said Auggie Tantillo, president and CEO of the National Council of Textile Organizations.
“While appreciative of today’s actions, NCTO is convinced that the Trump administration’s efforts to deter China’s unfair trade practices would be even more effective if textile and apparel end products from China were made subject to Section 301 tariffs.”
The domestic boating industry, however, was critical of the announcement, as the tariff lines include marine engines, navigational equipment and other components important to the industry. According to a release from the National Marine Manufacturers Association (NMMA), the tariffs list includes nearly 300 marine industry products.
“The U.S. recreational boating industry – a $39 billion industry that supports 650,000 American jobs – faces another setback due to the Trump Administration’s actions on trade,” NMMA President Thom Dammrich said in a prepared statement. “Today’s announcement on Section 301 tariffs once again puts our proud, uniquely American-made industry at the mercy of bad trade policies that are piling up on top of each other. Collectively, these tariffs are causing the price of raw materials and marine parts to rise rapidly and stifling U.S. boat exports.
“The 301 tariffs compound prior trade actions that are already harming the American recreational boating industry. From Section 232 and 301 tariffs, to countervailing and anti-dumping duties, our industry is under assault on multiple fronts. These actions are already upsetting global markets and hurting American consumers, businesses, and workers.”
The Auto Care Association was also critical of the Trump administration’s decision.
“The Auto Care Association supports the administration’s efforts to protect U.S. intellectual property, but regrets that the administration has neglected to evaluate the economic harm to the cost of repair and maintenance of the family autos and the unintended consequences of trade restrictions on the average American family,” a statement on the association’s website said.