Tech startups continue to join the many hundreds from various industries filing comments in docket USTR-2018-0026 opposing a third tranche of 25 percent Trade Act Section 301 tariffs on Chinese imports. One such startup, Culture Audio of Chattanooga, aims to be the first “scaled consumer product company in the headphone space based in the southeast” but worries tariffs will derail the company before it even leaves the station, commented CEO Joshua Simmons Thursday.

The House could pass the Miscellaneous Tariff Bill in the first week or so following a return from recess after Labor Day "if they think that they can get it passed and get it through the president to sign," said Jon Kent, a lobbyist for the National Customs Brokers & Forwarders Association of America with Kent & O'Connor. One potential issue could be inconsistency concerns within the administration over tariff cuts on many goods that come from China as other tariffs are being added under Section 301 and other trade remedies, Kent said.

The International Trade Commission recently issued Revision 10 to the Harmonized Tariff Schedule, implementing Section 301 tariffs on a second set of goods from China effective Aug. 23, and making related changes that also affect the first tranche. New subheading 9903.88.02 is created for the new set of goods, with goods in the first tariff list that took effect July 6 still classifiable in subheading 9903.88.01 (see 1808210031). A list of goods subject to the new tariffs is added in U.S. Note 20(d) to Subchapter II of Chapter 99, while provisions on how the tariffs are to be applied are added at U.S. Note 20(c). The list of goods subject to the first round of tariffs at U.S. Note 20(b) is modified to correct a technical error. Provisions at U.S. Note 20(a) on how those tariffs are to be applied are modified to reflect the end of a total exemption from the Section 301 tariffs on U.S. goods returned after repair or alteration, processing or assembly (see 1808160049). All changes included in Revision 10 take effect Aug. 23.

The National Association of Foreign-Trade Zones recently wrote to Foreign-Trade Zones Board Executive Secretary Andrew McGilvray as part of the group's effort to address the "unintended and injurious impact" of section 201 and 301 tariffs on manufacturers in U.S. FTZs. NAFTZ is trying to get the Office of the U.S. Trade Representative to resolve issues involving the USTR's trade remedy language that results in unfair treatment of goods manufactured within FTZs (see 1808220034). "We respectfully request that the Foreign-Trade Zones Board communicate immediately with USTR to help resolve this increasingly-damaging situation for American FTZ manufacturers," he said.

CBP issued the following releases on commercial trade and related matters:​

Trade Act Section 301 tariffs “remain the wrong solution to real problems” in thwarting allegedly unfair Chinese trade practices, said the Internet Association in comments posted in docket USTR-2018-0026. The comments previewed testimony that Jordan Haas, the group’s director-trade and international policy, gave at hearings Wednesday, saying IA wants two line items removed from the proposed third tranche of 25 percent tariffs. Haas testified on the same panel as the Telecommunications Industry Association, which also opposes tariffs TIA says would “handicap” the U.S. in its 5G “contest” against China (see 1808130015).

CTA identified 380 tariff codes that would cause “significant harm” to the consumer technology industry’s member companies and to consumers resulting from the third installment of Trade Act Section 301 duties against Chinese imports, blogged Sage Chandler, CTA vice president-international trade, Tuesday. She cited codes identifying items that allow access to the internet, including servers, desktop computers, printed circuit assemblies and connected devices. Connected devices cover a "vast array of tech products" including e-readers, smartwatches, speakers and fitness devices, plus the components and the infrastructure products that make them work, such as modems, routers and gateways, Chandler said. Tariffs, as a remedy to shortcomings in Chinese national policy and practice, are more likely to cause “adverse short- and long-term consequences to our economy than incentivize change in China's discriminatory IP practices,” she said. If enacted, new tariffs affecting $200 billion in trade will continue the “destructive ripple effect” the Trump administration started with the first round of tariffs that affected the tech industry and the U.S. economy as a whole, Chandler said. Products on the proposed tariff list “disproportionately impact small companies, many of which manufacture and assemble in the United States, and startup companies that design and engineer U.S. intellectual property.” A CTA study said 25 percent tariffs on printed circuit board assemblies and connected devices will cause price increases of up to 6 percent, even affecting products made entirely with U.S. labor and components. CTA estimates those increases will cause a consumer spending drop of 12 percent. “Price shock and drop in demand have the potential to devastate our industry,” said Chandler, with the impact of a 25 percent tariff on connected devices alone expected to cost American consumers an extra $3.2 billion annually. “That contradicts USTR's stated aim in the product selection process of avoiding goods commonly purchased by American consumers,” she said. Technology tariffs are “counterproductive,” said the trade specialist, at a time when the U.S. is looking to achieve “digital integration, advanced telecommunications technology and increase internet access for rural populations.” Tariffs are taxes on Americans, not foreign governments, she said, and they "undermine the competitiveness of American companies.” Tech firms that testified Tuesday in a second day of public hearings on the tariffs were asked about the practicality of sourcing products from countries other than China. Brilliant Home Technology did an "evaluation" of where it could source products other than from China, and did so "before we knew about tariffs," said CEO Aaron Emigh. The company found quality in Vietnam and Indonesia couldn't match Chinese standards, he said. India could manufacture the product well, but since most of the components come from China, extending the supply chain in that way would introduce risks Brilliant felt weren't worth it, he said. "In our estimation it was not practical to manufacture anywhere outside of China," he said.

CTA identified 380 tariff codes that would cause “significant harm” to the consumer technology industry’s member companies and to consumers resulting from the third installment of Trade Act Section 301 duties against Chinese imports, blogged Sage Chandler, CTA vice president-international trade, Tuesday. She cited codes identifying items that allow access to the internet, including servers, desktop computers, printed circuit assemblies and connected devices. Connected devices cover a "vast array of tech products" including e-readers, smartwatches, speakers and fitness devices, plus the components and the infrastructure products that make them work, such as modems, routers and gateways, Chandler said. Tariffs, as a remedy to shortcomings in Chinese national policy and practice, are more likely to cause “adverse short- and long-term consequences to our economy than incentivize change in China's discriminatory IP practices,” she said. If enacted, new tariffs affecting $200 billion in trade will continue the “destructive ripple effect” the Trump administration started with the first round of tariffs that affected the tech industry and the U.S. economy as a whole, Chandler said. Products on the proposed tariff list “disproportionately impact small companies, many of which manufacture and assemble in the United States, and startup companies that design and engineer U.S. intellectual property.” A CTA study said 25 percent tariffs on printed circuit board assemblies and connected devices will cause price increases of up to 6 percent, even affecting products made entirely with U.S. labor and components. CTA estimates those increases will cause a consumer spending drop of 12 percent. “Price shock and drop in demand have the potential to devastate our industry,” said Chandler, with the impact of a 25 percent tariff on connected devices alone expected to cost American consumers an extra $3.2 billion annually. “That contradicts USTR's stated aim in the product selection process of avoiding goods commonly purchased by American consumers,” she said. Technology tariffs are “counterproductive,” said the trade specialist, at a time when the U.S. is looking to achieve “digital integration, advanced telecommunications technology and increase internet access for rural populations.” Tariffs are taxes on Americans, not foreign governments, she said, and they "undermine the competitiveness of American companies.” Tech firms that testified Tuesday in a second day of public hearings on the tariffs were asked about the practicality of sourcing products from countries other than China. Brilliant Home Technology did an "evaluation" of where it could source products other than from China, and did so "before we knew about tariffs," said CEO Aaron Emigh. The company found quality in Vietnam and Indonesia couldn't match Chinese standards, he said. India could manufacture the product well, but since most of the components come from China, extending the supply chain in that way would introduce risks Brilliant felt weren't worth it, he said. "In our estimation it was not practical to manufacture anywhere outside of China," he said.

CTA identified 380 tariff codes that would cause “significant harm” to the consumer technology industry’s member companies and to consumers resulting from the third installment of Trade Act Section 301 duties against Chinese imports, blogged Sage Chandler, CTA vice president-international trade, Tuesday. She cited codes identifying items that allow access to the internet, including servers, desktop computers, printed circuit assemblies and connected devices. Connected devices cover a "vast array of tech products" including e-readers, smartwatches, speakers and fitness devices, plus the components and the infrastructure products that make them work, such as modems, routers and gateways, Chandler said. Tariffs, as a remedy to shortcomings in Chinese national policy and practice, are more likely to cause “adverse short- and long-term consequences to our economy than incentivize change in China's discriminatory IP practices,” she said. If enacted, new tariffs affecting $200 billion in trade will continue the “destructive ripple effect” the Trump administration started with the first round of tariffs that affected the tech industry and the U.S. economy as a whole, Chandler said. Products on the proposed tariff list “disproportionately impact small companies, many of which manufacture and assemble in the United States, and startup companies that design and engineer U.S. intellectual property.” A CTA study said 25 percent tariffs on printed circuit board assemblies and connected devices will cause price increases of up to 6 percent, even affecting products made entirely with U.S. labor and components. CTA estimates those increases will cause a consumer spending drop of 12 percent. “Price shock and drop in demand have the potential to devastate our industry,” said Chandler, with the impact of a 25 percent tariff on connected devices alone expected to cost American consumers an extra $3.2 billion annually. “That contradicts USTR's stated aim in the product selection process of avoiding goods commonly purchased by American consumers,” she said. Technology tariffs are “counterproductive,” said the trade specialist, at a time when the U.S. is looking to achieve “digital integration, advanced telecommunications technology and increase internet access for rural populations.” Tariffs are taxes on Americans, not foreign governments, she said, and they "undermine the competitiveness of American companies.” Tech firms that testified Tuesday in a second day of public hearings on the tariffs were asked about the practicality of sourcing products from countries other than China. Brilliant Home Technology did an "evaluation" of where it could source products other than from China, and did so "before we knew about tariffs," said CEO Aaron Emigh. The company found quality in Vietnam and Indonesia couldn't match Chinese standards, he said. India could manufacture the product well, but since most of the components come from China, extending the supply chain in that way would introduce risks Brilliant felt weren't worth it, he said. "In our estimation it was not practical to manufacture anywhere outside of China," he said.

National Association of Foreign-Trade Zones President Erik Autor is set to meet with officials at the Office of the U.S. Trade Representative in the coming weeks to discuss a quirk in foreign-trade zone filing requirements that’s resulting in the unfair application of Section 301 duties, he said in an Aug. 21 interview. Autor seeks to educate USTR on how tariffs apply to FTZ goods, in the hopes that the agency will amend Section 301 implementation language related to zones that CBP says leaves it with no choice but to sometimes collect the tariffs on inputs that sometimes aren’t even Chinese.