TVs were the big winner Friday when the Office of the U.S. Trade Representative eliminated them from its final list of Chinese imports earmarked for Trade Act Section 301 tariffs of 25 percent. Other sectors didn’t fare so well, including those that import Chinese printer parts, thermostats and computer equipment used in artificial intelligence and blockchain technology. China vowed to retaliate "immediately."

TVs were the big winner Friday when the Office of the U.S. Trade Representative eliminated them from its final list of Chinese imports earmarked for Trade Act Section 301 tariffs of 25 percent. Other sectors didn’t fare so well, including those that import Chinese printer parts, thermostats and computer equipment used in artificial intelligence and blockchain technology. China vowed to retaliate "immediately."

Most of the computer, aviation and automotive, electrical and machinery products that will be hit by tariffs under Section 301 are produced by foreign companies operating in China, according to an updated study from the Peterson Institute for International Economics. The think tank says it aims to do "truth telling about the benefits of globalization" as well as study labor market adjustment due to globalization and how to find a sustainable growth model for mature economies.

The U.S. plans to impose a 10 percent tariff on an additional $200 billion worth of goods from China in response to China's retaliatory tariffs, President Donald Trump said in a June 18 statement. China's decision to implement 25 percent tariffs on $34 billion in U.S. imports, mirroring the Section 301 tariffs, shows China "has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology," said Trump. "The latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage."

The U.S. plans to impose a 10 percent tariff on an additional $200 billion worth of goods from China in response to China's retaliatory tariffs, President Donald Trump said in a June 18 statement. China's decision to implement 25 percent tariffs on $34 billion in U.S. imports, mirroring the Section 301 tariffs, shows China "has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology," said Trump. "The latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage."

A second U.S. House member from North Carolina went to bat for Cree’s attempt (see 1806110033) to fend off Trade Act Section 301 tariffs on U.S. imports of LEDs from China. The company produces LED wafers at its plant in Durham, North Carolina, exports them to China for making them into finished packaged chips and re-imports those chips to the U.S., said David Price (D) in a June 8 letter to U.S. Trade Representative Robert Lighthizer posted Wednesday in docket USTR-2018-0005. Cree would be forced to pay 25 percent higher duties on the devices, “despite the fact that approximately 70 percent of the value of these LED chips and components" is based on U.S. IP, Price said.

A second U.S. House member from North Carolina went to bat for Cree’s attempt (see 1806110033) to fend off Trade Act Section 301 tariffs on U.S. imports of LEDs from China. The company produces LED wafers at its plant in Durham, North Carolina, exports them to China for making them into finished packaged chips and re-imports those chips to the U.S., said David Price (D) in a June 8 letter to U.S. Trade Representative Robert Lighthizer posted Wednesday in docket USTR-2018-0005. Cree would be forced to pay 25 percent higher duties on the devices, “despite the fact that approximately 70 percent of the value of these LED chips and components" is based on U.S. IP, Price said.

A second House member from North Carolina went to bat for Cree in the company’s attempt to fend off Trade Act Section 301 tariffs on U.S. imports of LEDs from China. The company produces LED wafers at its plant in Durham, North Carolina, exports them to China for making them into finished packaged chips and re-imports those chips to the U.S., said Rep. David Price, D-N.C., in a June 8 letter to U.S. Trade Representative Robert Lighthizer posted Wednesday in docket USTR-2018-0005. Cree began exporting the wafers 11 years ago to a plant it owns in Huizhou so it could “serve the rapidly growing and large Chinese and Asian markets,” said Price, who said 2,500 Cree employees work in his congressional district in Durham. Unless the USTR’s office removes from the tariffs list LEDs classified under the Harmonized Tariffs Schedule subheading 85414020, Cree would be forced to pay 25 percent higher duties on the devices, “despite the fact that approximately 70 percent of the value of these LED chips and components are based on U.S. intellectual property,” Price said. Including those LEDs on the final tariffs list “erroneously entangles the company into tariff proposals that are unlikely to result in a reduction of unfair IP practices in China,” he said. Rep. George Holding, R-N.C., earlier urged Lighthizer to remove Chinese LED imports from the final tariffs list (see 1806100001). The White House announced May 29 that the USTR’s office will release its final tariffs list by Friday and the tariffs will take effect “shortly thereafter” (see 1805290046).

The reactions from industry and Capitol Hill on the Section 301 tariffs were largely split along lines previously drawn over the Trump administration's general approach to tariffs. House Ways and Means Committee Chairman Kevin Brady, R-Texas, said in a news release that while the changes from the initial list of products from China were "encouraging, " he is "alarmed that additional products are now placed on the list for possible future action." Brady called on the Office of the U.S. Trade Representative to "narrow these tariffs and implement an effective exclusion process that provides relief for American companies, unlike the problematic Commerce 232 exclusion process.”

China will implement retaliatory 25 percent tariffs on 545 tariff lines, largely agricultural and auto targets, but also "aquatic products," on July 6, it said in a statement. Like the U.S., it is saving an additional $16 billion in targets in reserve. For China, those will be chemicals, energy imports and medical equipment. For the U.S., semiconductors, plastics, railcars, tractors, cranes and new industrial machinery lines could be in the second phase. China's tariffs are in response to the Section 301 tariffs on imports into the U.S. set to begin July 6 (see 1806150003)