Tech Interests Among Many Hundreds Seeking to Testify Against Chinese Tariffs
Micro Electronics and GlobiTech were among the tech interests joining many hundreds of companies -- the vast majority in opposition to the duties -- asking to testify during four days of hearings beginning Aug. 20 on the proposed third tranche of Trade Act Section 301 tariffs on an estimated $200 billion worth of Chinese imports.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Requests were due Monday in docket USTR-2018-0026 under the deadline U.S. Trade Representative Robert Lighthizer extended from July 27 when he announced Aug. 1 he will “consider,” at President Donald Trump’s direction, raising the third tranche of proposed duties to 25 percent from 10 percent (see 1808010018). Lighthizer in an Aug. 7 notice said he reserves the option to “extend the length of the hearing depending on the number of additional interested persons who request to appear.”
Micro Electronics CEO Richard Mershad wants to testify for removing six Harmonized Tariff Schedule line items from the list, said his representatives in comments posted Tuesday. It's the privately held parent company of retailer Micro Center, which runs 25 brick-and-mortar computer and electronics stores nationally and an e-commerce site.
The categories Mershad wants removed from the tariffs list: (1) servers (HTS 8471.50.01); (2) circuit boards (HTS 8473.30.11); (3) computer Parts (HTS 8473.30.51); (4) network components (HTS 8517.62.00); and (5) video cards ((HTS 8471.80.90 and 8473.30.11).Imposing tariffs on those products wouldn't be “consistent” with the Trump administration’s “stated intent” to avoid targeting goods with duties that would hurt U.S. consumers, said the filing.
Those computers and parts “are not available in the required quantities outside China,” it said. “The technology behind these parts will not advance China up the value chain,” nor will imposing tariffs on those goods change China’s allegedly unfair trade practices, it said. Tariffs “would have a severe impact on the domestic industry, downstream businesses and, most worrisome, American consumers,” to whom the higher costs will be “passed on,” it said.
GlobiTech wants to testify against tariffs on the raw materials it imports from China under HTS 3818.00.00 to manufacture silicon epitaxial wafers, said the company. Those wafers are a $3 billion “subset” serving the global semiconductor industry, it said. “Disruption of GlobiTech's production” through the duties “would have a major global impact on the electronics industry,” they said. “As the world's largest supplier of silicon epitaxial products, chances are that smartphone that you are holding has ‘some GlobiTech in it.’"
Tariffs on the HTS 3818.00.00 raw materials would leave GlobiTech “without internal or external alternatives,” said the company. Sourcing those materials from countries other than China would “take a minimum of two years of qualification effort before product can be delivered,” it said. “The imposition of tariffs on GlobiTech's key raw material would serve to seriously harm, if not potentially destroy, GlobiTech's ability to compete in the extremely competitive silicon epitaxial wafer global marketplace while at the same time having no impact on China's trade policies and actions.” Tariffs also would endanger GlobiTech’s 225 employees “in high-tech manufacturing in rural Sherman, Texas,” said the company.