USTR Proposes Third Round of Tariffs on Chinese Imports

Targets $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent

On July 10, 2018, the United States Trade Representative (USTR) announced it was initiating the process of imposing a 10% tariff on Chinese imports as a supplemental action under Section 301 of the Trade Act of 1974.  USTR’s proposed list covers more than 6,000 products, including seafood and agriculture, chemicals, textiles, metals, electronics, and a host of consumer goods from apparel to furniture to appliances.  The list is valued at $200 billion annually and follows prior action on $50 billion worth of Chinese imports.

This latest round of tariffs will take effect at a later date following a public review process, including an opportunity for the submission of written comments and an opportunity to participate in a public hearing.  USTR is seeking public input on:

• Whether any listed products should be retained or removed, and whether any products not listed should be added;
• The level of the duty rate; and
• The appropriate aggregate level of trade to be covered by additional duties.

Key dates include:

• July 27, 2018: Due date for filing requests to appear and a summary of expected testimony at the public hearing, and for filing pre-hearing submissions.
• August 17, 2018: Due date for submission of written comments.
• August 20-23, 2018: Section 301 Committee public hearing.
• August 30, 2018: Due date for submission of post-hearing rebuttal comments.

The tariffs are part of the Trump Administration’s response to USTR’s investigation under Section 301(b)(1) of the Trade Act of 1974 regarding China’s acts, policies and practices related to intellectual property and forced technology transfers.  As mentioned, the most recent announcement follows prior USTR action on a combined $50 billion worth of Chinese imports:

• The first set of tariffs – which took effect July 6, 2018 – covers 818 products valued at $34 billion (at a tariff rate of 25%).  The list was drawn from a draft list of 1,333 products published in April and finalized by USTR after a public comment process.  On July 6, USTR announced a product exclusion process for domestic interests seeking product-specific exclusions from the tariffs.
• A second set of 284 products – valued at $16 billion – will see tariffs take effect at a later date following an ongoing public review process similar to that outlined above.
• The tariffs in these first two sets targeted Chinese imports containing “industrially significant technologies, including those related to China’s ‘Made in China 2025’ industrial policy.”
• The third set includes products from across all sectors of the Chinese economy, including some subheadings that commenters suggested for inclusion in the first round.

China announced retaliatory tariffs almost immediately in response to the U.S. release of its first two lists.  On June 18, following China’s announcement, President Trump directed USTR to identify $200 billion worth of Chinese goods for additional tariffs.  In response to USTR’s release of its latest list, China indicated it was considering non-tariff retaliatory measures.