Remove 54 Lines From List of Chinese Imports Targeted for Tariffs, Urges CTA

The 54 tariff lines were well more than double the 22 Harmonized Tariff Schedule product codes that Chandler said CTA members had identified nearly four weeks ago for exclusion from the new list of duties (see 1807100015). Tariffs on the proposed products “will harm the very industries they seek to protect, all while failing to influence China's behavior or help the administration's stated goal of eliminating China’s discriminatory trade practices,” said Chandler in her latest comments.

A statement of CTA's “rationale” for wanting a product code removed from consideration for possible duties accompanied each of the 54 tariff lines listed in Chandler’s comments. Many conveyed the statement that they were earmarked for removal as “highlighted by CTA member company as critical to their business,” or “not targeted in China’s Made in China 2025 plan, and not part of China’s core industrialization strategy.”

Other categories carried fuller explanations of rationale for asking that they be removed from the tariffs list. Under the HTS 8542.31.00 product code for “electronic integrated circuits: processors and controllers,” CTA wants it excluded on grounds that a member company “imports items under this code because it would be unable to switch sourcing and is not yet able to further expand domestic manufacturing capability,” said the statement.

A tariff on imports of products under HTS 8542.31.00 would “upend the member’s supply chain, undermine its U.S. manufacturing operations, and make the company uncompetitive against foreign manufacturers,” said the statement. Products in this HTS code “are found in many consumer technology products,” it said. “Product may be manufactured in the United States but packaged in China, meaning U.S. companies and manufacturers may pay the tariff on their own products.”

The overall proposed duties list is “heavy” on semiconductors “and the machinery that makes them,” and those tariff lines need to be removed, said Chandler. China controls only 5 percent of the global semiconductors market, and the U.S. “is the world's market share leader,” she said. Most semiconductors the U.S. imports were made in the U.S., shipped to China for final, low-end assembly and packaging, and then shipped back to the U.S., she said. “Tariffs placed on the equipment used to manufacture semiconductors therefore impose a double cost for semiconductor companies that manufacture in the United States and employ hundreds of thousands of Americans.”

Another product code, HTS 8543.70.45, includes motion sensors that are “for everyday household use” and are “key components of home security systems,” said the CTA rationale statement. Tariffs on these products “will punish the US consumer, imposing a double burden of (1) higher prices on a consumer necessity, and (2) compromised household safety because consumers will be less able to afford technologically advanced home security systems,” it said. “Tariffs will also hurt the retailers and small business installers who sell and install home security systems by increasing prices and depressing demand.”

Lutron’s ability to import Chinese semiconductors under the HTS 8542.39.00 product code “is essential to our ongoing research and development activities at our five U.S. engineering facilities as well as our U.S. manufacturing,” said the company in heavily redacted comments. “Lutron supports the administration’s goal to protect America’s leadership in technology and innovation” against China’s allegedly unfair practices, it said. “We are requesting an exclusion for a limited number of components that would not have any impact on convincing the Chinese” to change their behavior, it said.

The proposed duties on Chinese imports of semiconductors classified under HTS codes 8542.31.00 and 8542.32.00 “would further undermine U.S. competitiveness in information technology, threaten U.S. manufacturing and jobs, and do nothing to further the goals of the Section 301 investigation,” said Dell Technologies. “We are deeply troubled by the cumulative and self-destructive impact of Section 301 tariffs on critical information technology inputs.”

Voxx International wants five tariff lines (HTS 3903.19.00, 8529.10.91, 8544.49.20, 8536.30.80, and 8543.70.99) removed from the list of proposed duties, it said. The “subject products,” including antenna components and voltage protectors, are used “to facilitate the safe operation of finished goods and systems,” said Voxx. They’re “low-end” and “generic items, not possessing the proprietary data or materials of the finished goods which with they operate.”

“Certainty and cost” are the “two major factors in maintaining a strong, secure supply chain,” said the Retail Industry Leaders Association, which represents Best Buy, Walmart and other big-box retail chains. “Retailers need assurances that the products they sell can be made at the quality, quantity and cost our customers demand.” Though there’s “no good time for price increasing tariffs” to be imposed, “it is particularly harmful to do so just as American families begin shopping for the holiday,” said RILA. “If America’s retailers face any increase in the cost of products in the form of a tariff, it will mean higher prices at the checkout for American families this holiday season.”

Imposing a second round of 25 percent tariffs in addition to those enacted July 6 "would make the U.S. a less attractive location for electroindustry manufacturing, an outcome no one wants," said the National Electrical Manufacturers Association in Monday comments. "The tariffs will not only impact electroindustry manufacturers’ supply chains, but also may be passed on to their customers’ supply chains and the broader U.S. industrial and infrastructure base," said NEMA. Many of the targeted products "help support capabilities and operations of many other manufacturing sectors and the built infrastructure, including the electrical grid and hospitals. While in some cases China is not the only or top source of imports for specific targeted items, in some cases they are both."

It’s time for Congress to “take back its tariff-imposing authority,” blogged Merrill Matthews, resident scholar at the Institute for Policy Innovation, Tuesday. President Donald Trump’s “tariff overreach has led to congressional pushback,” said Matthews. Constitutional framers wanted “taxing power residing in Congress, especially the House, and for good reason,” he said. “Members of Congress were considered closer to the people and the states and would be more responsive to their wishes. That is almost certainly true here, as multiple news stories highlight how working Americans are getting hit by Trump’s self-imposed tariffs.” Tariffs are taxes “that the government imposes on its own people,” he said. “Constitutionally speaking, only Congress has the power to tax -- at least until it ceded some of that authority. Congress needs to put that power back where it belongs.”