Trump Considers More Tariffs on Imports from China

Tuesday, April 10, 2018

Sandler, Travis & Rosenberg Trade Report

President Trump has raised the prospect of increasing tariffs on additional $100 billion worth of imports from China in an escalating trade dispute. However, he also held open the possibility the two sides could work out an agreement to avoid the tariffs.

The Office of the U.S. Trade Representative has proposed a list of more than 1,300 goods imported from China that could be subject to an additional 25 percent duty in response to a section 301 investigation concluding that China is coercing U.S. companies into transferring their technology and intellectual property to Chinese enterprises. Imports of such goods are currently valued at approximately $50 billion, the amount of damage the U.S. claims China’s policies have caused. USTR is accepting comments on this list by May 11 and will hold a public hearing May 15.

In response, China announced its own plans for a 25 percent tariff hike on 106 goods imported from the U.S., largely in politically sensitive industries such as agriculture and automobiles. No specific dates have been set for implementation of the tariffs by either side.

A statement from the White House said that because China has chosen this course of action “instead of addressing its misconduct” Trump has directed USTR to “determine if an additional $100 billion worth of tariffs would be appropriate under section 301.” The statement noted that any additional tariffs would be subject to a similar review and public comment period as the initial list, and USTR added that no tariffs will go into effect until this process is complete. Chinese officials said Beijing would “fight back resolutely” if the U.S. goes forward with Trump’s threat.

The White House statement said the U.S. “is still prepared to have discussions in further support of our commitment to achieving free, fair, and reciprocal trade and to protect the technology and intellectual property of American companies and American people.” However, despite some reports to the contrary, the two sides do not appear to have held or scheduled any such talks.

The House Ways and Means Committee will hold a hearing April 12 to review the effect of the Section 301 tariffs, as well as the Section 232 duty increases on steel and aluminum imports, on the U.S. economy and jobs. Comments for the hearing record are due by April 26. Committee Chairman Kevin Brady, R-Texas, said in response to the latest threat of tariff increases on China that “it is in both our countries’ interest – and frankly, the world’s – to find a new path forward on unfair trade practices.”

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