The Trump administration’s proposed Trade Act Section 301 tariffs on a third tranche of Chinese goods worth about $200 billion in customs value “would target many key components that make cloud computing possible,” reported the Information Technology and Innovation Foundation Tuesday. The administration “in theory” initiated the tariffs to “counteract unfair Chinese trade practices and improve U.S. competitiveness,” said ITIF. “But their practical effect would be to advantage foreign technology competitors, thereby threatening U.S. leadership in both the adoption and provision of cloud computing, and stunting U.S. economic growth,” it said. Though Chinese “innovation mercantilism” is a “laudable and necessary mission,” the administration needs to “seek alternative policy measures that do not raise the cost of key productivity -- and innovation-enhancing capital goods and services such as information technology and cloud computing,” it said. ITIF fears that tariffs would raise prices for businesses and consumers and force cloud-service providers to cut costs through job reductions or curtail spending on new data centers or the R&D “needed to stay ahead of international competitors,” it said. It also worries that cloud providers “may be forced to invest elsewhere to remain competitive,” it said. Tariffs also “threaten to disrupt finely crafted global supply chains for the manufacture of information-technology products,” it said. Those supply chains can’t “easily be reinvented in the short term without significant detriment to, and dislocation of, U.S. industry,” it said.
The Trump administration’s proposed Section 301 tariffs on a third tranche of Chinese goods worth about $200 billion in customs value “would target many key components that make cloud computing possible,” the Information Technology and Innovation Foundation reported on Sept. 4. The administration “in theory” initiated the tariffs to “counteract unfair Chinese trade practices and improve U.S. competitiveness,” ITIF said. “But their practical effect would be to advantage foreign technology competitors, thereby threatening U.S. leadership in both the adoption and provision of cloud computing, and stunting U.S. economic growth,” it said. Though “contesting Chinese innovation mercantilism” is a “laudable and necessary mission,” the administration needs to “seek alternative policy measures that do not raise the cost of key productivity -- and innovation-enhancing capital goods and services such as information technology and cloud computing,” it said. ITIF fears that tariffs would raise prices for businesses and consumers and force cloud-service providers to cut costs through job reductions or curtail spending on new data centers or the research and development “needed to stay ahead of international competitors,” it said. It also worries that cloud providers “may be forced to invest elsewhere to remain competitive,” it said. Tariffs also “threaten to disrupt finely crafted global supply chains for the manufacture of information-technology products,” it said. Those supply chains can’t “easily be reinvented in the short term without significant detriment to, and dislocation of, U.S. industry,” it said.
The Trump administration’s proposed Trade Act Section 301 tariffs on a third tranche of Chinese goods worth about $200 billion in customs value “would target many key components that make cloud computing possible,” reported the Information Technology and Innovation Foundation Tuesday. The administration “in theory” initiated the tariffs to “counteract unfair Chinese trade practices and improve U.S. competitiveness,” said ITIF. “But their practical effect would be to advantage foreign technology competitors, thereby threatening U.S. leadership in both the adoption and provision of cloud computing, and stunting U.S. economic growth,” it said. Though Chinese “innovation mercantilism” is a “laudable and necessary mission,” the administration needs to “seek alternative policy measures that do not raise the cost of key productivity -- and innovation-enhancing capital goods and services such as information technology and cloud computing,” it said. ITIF fears that tariffs would raise prices for businesses and consumers and force cloud-service providers to cut costs through job reductions or curtail spending on new data centers or the R&D “needed to stay ahead of international competitors,” it said. It also worries that cloud providers “may be forced to invest elsewhere to remain competitive,” it said. Tariffs also “threaten to disrupt finely crafted global supply chains for the manufacture of information-technology products,” it said. Those supply chains can’t “easily be reinvented in the short term without significant detriment to, and dislocation of, U.S. industry,” it said.
The Trump administration’s proposed Trade Act Section 301 tariffs on a third tranche of Chinese goods worth about $200 billion in customs value “would target many key components that make cloud computing possible,” reported the Information Technology and Innovation Foundation Tuesday. The administration “in theory” initiated the tariffs to “counteract unfair Chinese trade practices and improve U.S. competitiveness,” said ITIF. “But their practical effect would be to advantage foreign technology competitors, thereby threatening U.S. leadership in both the adoption and provision of cloud computing, and stunting U.S. economic growth,” it said. Though Chinese “innovation mercantilism” is a “laudable and necessary mission,” the administration needs to “seek alternative policy measures that do not raise the cost of key productivity -- and innovation-enhancing capital goods and services such as information technology and cloud computing,” it said. ITIF fears that tariffs would raise prices for businesses and consumers and force cloud-service providers to cut costs through job reductions or curtail spending on new data centers or the R&D “needed to stay ahead of international competitors,” it said. It also worries that cloud providers “may be forced to invest elsewhere to remain competitive,” it said. Tariffs also “threaten to disrupt finely crafted global supply chains for the manufacture of information-technology products,” it said. Those supply chains can’t “easily be reinvented in the short term without significant detriment to, and dislocation of, U.S. industry,” it said.
Though the vast majority of the nearly 3,000 comments in docket USTR-2018-0026 opposed a third tranche of Trade Act Section 301 tariffs on Chinese goods, Veeco Instruments supports the proposed duties on “indicator panels incorporating LCDs or LEDs” imported from China under the Harmonized Tariff Schedule’s 8531.20.00 subheading, said the company in Aug. 30 comments posted Sunday. Veeco also wants U.S. Trade Representative Robert Lighthizer to impose duties on six more tariffs lines of LED-related goods not currently proposed in the third tranche, said the company in a heavily redacted document to hide “business confidential” information. The eight-page document also contained roughly two dozen redactions to hide Veeco's identity, except for one reference by name to Veeco that apparently slipped through. A revised document posted in the docket Tuesday deleted that one Veeco reference and replaced the previous document, which is now listed in the docket as "restricted to show metadata only because it contains confidential business information data." The publicly traded Veeco did about $485 million in 2017 revenue, mainly through the sales of semiconductor process equipment used to produce LEDs and other components, said the company’s most recent SEC 10-K. Imposing tariffs on LEDs and products containing them will “ensure that Chinese producers” positioned to manufacture those products “will not benefit from having unfettered access to the U.S. market,” said Veeco. The tariffs also “will encourage U.S. consumers to purchase such products from other sources that do not rely on stolen intellectual property to make these products,” it said. Luke Meisner, the Schagrin Associates lawyer who filed the comments on Veeco's behalf, declined comment Tuesday.
Though the vast majority of the nearly 3,000 comments in docket USTR-2018-0026 opposed a third tranche of Section 301 tariffs on Chinese goods, Veeco Instruments supports the proposed duties on “indicator panels incorporating LCDs or LEDs” imported from China under the Harmonized Tariff Schedule’s 8531.20.00 subheading, the company said in Aug. 30 comments posted in the docket. Veeco also wants U.S. Trade Representative Robert Lighthizer to impose duties on six more tariffs lines of LED-related goods not currently proposed in the third tranche, the company said in a document heavily redacted to hide “business confidential” information. The eight-page document also contained roughly two dozen redactions to hide Veeco's identity, except for one reference by name to Veeco that apparently slipped through. A revised document later posted in the docket deleted that one Veeco reference and replaced the previous document, which is now listed in the docket as "restricted to show metadata only because it contains confidential business information data." The publicly traded Veeco did about $485 million in 2017 revenue, mainly through the sales of semiconductor process equipment used to produce LEDs and other components, said the company’s most recent 10-K at the Securities and Exchange Commission. Imposing tariffs on LEDs and products containing them will “ensure that Chinese producers” positioned to manufacture those products “will not benefit from having unfettered access to the U.S. market,” Veeco said. The tariffs also “will encourage U.S. consumers to purchase such products from other sources that do not rely on stolen intellectual property to make these products,” it said. Luke Meisner, the Schagrin Associates lawyer who filed the comments on his client’s behalf, declined to comment.
Sen. Elizabeth Warren, D-Mass., wants the Commerce Department to open a probe into the Trump administration’s practices of granting exemptions to the Trade Act Section 232 tariffs on steel and aluminum, she wrote Inspector General Peggy Gustafson Wednesday. Warren’s staff’s investigation and media reports suggest the exemption process is “arbitrary and opaque, replete with mistakes, and subject to political favoritism,” she said. “It is therefore imperative that your office investigate.” Warren cited a report that Office of Management and Budget Director Mick Mulvaney was trying to use his influence to win a tariffs exemption for Element Electronics, whose president, Mike O'Shaughnessy, a former Polaroid and Frigidaire executive, contributed $5,400 to Mulvaney's 2016 congressional re-election campaign in South Carolina, where Element runs what it bills as the only LCD TV assembly plant in the U.S. Element is fighting proposed Trade Act Section 301 tariffs -- not Section 232 duties -- on the LCD panels and motherboards its Winnsboro, South Carolina, assembly plant sources from China. Element will be forced to close the plant and source finished TVs from China if the proposed tariffs go through, David Baer, its general counsel, testified at public hearings Aug. 21 (see 1808270004). Baer didn’t comment Friday.
No records exist at the Office of the U.S. Trade Representative explaining how and why the agency removed finished TVs from China from the first tranche of Trade Act Section 301 tariffs imposed July 6 (see 1806150030), USTR emailed Thursday. We filed a Freedom of Information Act request Aug. 6 asking the agency for copies of all emails, reports and any other physical or electronic documentation shared among the 17 members of the interagency Section 301 committee charged with deciding which tariffs would stay and which would go from the list released April 6. We sought documents that would shed light on the deliberations among the committee members that led the agency to spare TVs from the 25 percent tariffs. It’s “difficult to read the tea leaves” why the USTR’s office deleted 40 percent of the product lines from its first list of proposed tariffs, including TVs, said a trade expert in July, just after the first tranche of duties took effect (see 1807180058). The agency did an automated search of the records stash of four USTR officials who are on the committee using an “eDiscovery tool,” and also did a “manual search” but found no materials that were “responsive” to our FOIA request, it said. The four officials whose records the agency said it searched were: Arthur Tsao, assistant general counsel and lead attorney in the Section 301 tariffs proceedings; Julia Howe, director-China; William Busis, deputy assistant USTR for monitoring and enforcement, and chairman of the Section 301 committee; and Terry McCartin, assistant USTR for China affairs. The list of 818 tariff lines released June 15 for action starting July 6 was culled from the 1,333 tariff lines proposed April 6, said the USTR’s office then. The list, which was compiled “based on extensive interagency analysis and a thorough examination of comments and testimony from interested parties,” didn't include goods “commonly purchased by American consumers such as cellular telephones or televisions,” it said then.
International Trade Today is providing readers with some of the top stories for Aug. 27-31 in case they were missed.
No records exist at the Office of the U.S. Trade Representative explaining how and why the agency removed finished TVs from China from the first tranche of Section 301 tariffs imposed July 6 (see 1806150003), USTR said in an email on Aug. 30. A Freedom of Information Act request submitted Aug. 6 asked for copies of all emails, reports and any other physical or electronic documentation shared among the 17 members of the interagency Section 301 committee charged with deciding which tariffs would stay and which would go from the list released April 6. The request, submitted by a sister publication to International Trade Today, sought documents that would shed light on the deliberations among the committee members that led the agency to spare TVs from the 25 percent tariffs. The agency did an automated search of the records stash of four USTR officials who serve on the committee using an “eDiscovery tool,” and also did a “manual search,” but found no materials that were “responsive” to our FOIA request, it said. The four officials whose records the agency said it searched included: Arthur Tsao, assistant general counsel and lead attorney in the Section 301 tariffs proceedings; Julia Howe, director-China; William Busis, deputy assistant USTR for monitoring and enforcement, and chairman of the Section 301 committee; and Terry McCartin, assistant USTR for China affairs.