As a Girl Scout or Boy Scout you probably learned the expression and meaning of “Be Prepared.” As an exporter or importer you may need to do just that.
As early as the end of this week President Trump is expected to announce a set of up to $60 billion in special tariffs (duties) against China. The reason behind these tariffs is allegations of intellectual property rights (IPR) infringement by Chinese companies. The tariffs could be applied to as many as 100 Chinese products, which the administration believes were made by stealing U.S. patents, trademarks and copyrights or by forcing U.S. companies to give the Chinese producers such IPR rights in exchange for access to the Chinese market.
As of this date the exact products, or Harmonized Tariff numbers, and the amount of the proposed tariff increases, are not known. In response to these threatened tariffs, no less than 45 U.S. trade associations and 49 major retailers have petitioned the President to not impose the tariffs, arguing that they would be harmful to U.S. industry and consumers. Instead the groups urge the administration to seek other means to address the situation.
It is also not known what the Chinese response to imposition of the tariffs would be. China is a major importer of U.S. raw materials, automobiles, agricultural goods, and other products. China could take retaliatory measures against these and other items.
The authority to impose the special duties arises from Section 301 of the Tariff Act 0f 1974. That law gives the U.S. Trade Representative broad authority to respond to another country’s unfair trade practices. In imposing the tariffs, the President would be acting on recommendation of the USTR after its investigation of the Chinese IPR practices.
Special tariffs may be coming soon – be prepared!