On April 3, 2018, the United States Trade Representative (“USTR”) published a proposed list of 1,333 Chinese products (the “Product List” or “List”) to be subject to an additional 25% tariff under Section 301 of the Trade Act of 1974 (the “Act”). The issuance of the Product List follows USTR’s March 22, 2018 release of the results of its Section 301 investigation into China’s practices and policies related to technology transfer, intellectual property, and innovation that the U.S. Government has deemed as “unreasonable or discriminatory” and a burden and restriction to U.S. commerce.
The Product List primarily targets imports from Chinese manufacturing sectors that benefit from the Chinese government’s “Made in China 2025” industrial policy initiative. The total value of the Product List is approximately $50 billion in terms of estimated annual trade value for calendar year 2018, which, according to USTR, is commensurate with an economic analysis of the harm caused by China’s technology transfer policies to the U.S. economy.
The Product List, which is available here, covers a wide array of product categories, including the following:
- Aluminum, iron, steel, and rubber, as well as articles made from such materials (e.g., line and casing pipe and tubing);
- Inorganic and organic chemicals;
- Pharmaceutical products;
- Machinery and mechanical appliances and parts;
- Electrical equipment and parts;
- Vehicles, aircraft, vessels and associated equipment;
- Optical, measuring, checking, precision, medical, and surgical instruments and apparatuses, as well as parts and accessories; and
- Arms and ammunition; as well as parts and accessories.
In accordance with Section 304(b) of the Act, the USTR invites the public to submit comments on the Product List and proposed tariff increase. Specifically, interested parties must submit written comments by May 11, 2018, after which the Section 301 Committee will convene a public hearing on May 15, 2018 to address the proposed actions.
In submitting comments, USTR requests that interested parties address the following:
- Whether the products listed in the Product List should be kept or removed or whether additional products not included in the List should be added;
- The level of increase in the rate of the duty (i.e., 25%);
- The appropriate aggregate level of trade to be covered by additional duties (i.e., about $50 billion);
- Whether imposing increased duties on a particular product would be practicable or effective to eliminate China’s unfair practices; and
- Whether maintaining or imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers.
USTR will publish the final list of products and tariff increases after the notice and comment period and after consultation with the appropriate agencies and committees.