Tech Interests to Testify Against Tariffs on Chinese Imports at Public Hearing Tuesday
Sage Chandler, CTA vice president-international trade, will be among several representing tech interests scheduled to testify Tuesday against 25 percent Trade Act Section 301 tariffs on Chinese imports when the Office of the U.S. Trade Representative convenes the first of two days of public hearings on the proposed duties, according to a witness list the agency released Monday. Chandler will testify that CTA members worry about the impact of tariffs on their supply chains and the duties will put them “at a disadvantage relative to their competitors in other nations,” she told the USTR in recent comments (see 1807100015).
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Two companies, Universal Electronics and Logitech, will argue at the hearing for excluding from the tariffs list remote controls and other devices imported from China under the Harmonized Tariff Schedule’s 8543.70.99 subheading, their recent comments in docket USTR-2018-0018 showed. The “vast majority” of Universal’s remotes are manufactured in Chinese factories that Universal owns and operates, said CEO Paul Arling, who will testify at the hearing. Imposing the additional duties on those products “would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers,” by forcing higher subscription costs for pay-TV and over-the-top services, said Arling.
Many of the spare parts and components U.S. companies import from China “are in fact made by other U.S. companies,” said Jonathan Davis, global vice president-industry advocacy at SEMI, which represents electronics industry supply-chain interests. Those companies hold on to their own intellectual property and “only perform low-value manufacturing in China, while the high value-added work is completed in the United States,” said Davis, who will testify Tuesday. SEMI has identified nearly 20 tariff lines on the proposed list that “directly impact semiconductor products” and should be removed, he said. Duties on those products “would collectively cost U.S. companies more than $500 million annually,” he said.
Another witness, Josh Kallmer, senior vice president-global policy at the Information Technology Industry Council, will testify for excluding several tariff lines on diodes and integrated circuits, he told the USTR. Tariffs are “the wrong answer to address this important issue” of persuading the Chinese to curb their allegedly unfair trade practices, said Kallmer. The higher duties will result in “undue costs that would be largely transferred to consumers and ordinary citizens through increased prices, depressed sales, decreased job growth, and increased unemployment,” he said. “The resulting disruption to global supply chains most severely harms American small businesses, as shifting input and production sources is inordinately difficult and costly for smaller businesses.”
Semiconductors are a “critical driver of U.S. economic competitiveness and technological leadership,” said David Isaacs, Semiconductor Industry Association vice president-government affairs, who will testify on the same panel as Kallmer. Imposing tariffs on semiconductors would “fail to address problematic Chinese forced tech transfer and IP theft,” he said. “Chinese companies export almost no semiconductors to the U.S. market. Most U.S. semiconductor imports from China are semiconductors designed and manufactured in the U.S., and then shipped to China for the final stage of semiconductor fabrication.” That phase is the “least value additive” step of production, “comprising as little as 10-15% percent of the value of the final product,” he said.