Chinese drugmakers and device makers, U.S. device makers that import Chinese components, and the distributors who sell supplies to hospitals and government agencies all asked the Section 301 panel to spare the healthcare sector from 25 percent tariffs on Chinese imports. The testimony came on the last of three days of hearings by the Office of the U.S. Trade Representative as the panel works to refine a list of 1,300 tariffs on $50 billion worth of Chinese goods. Witnesses said these Chinese items do not necessarily follow China's industrial policy of forced tech transfer or its efforts to leapfrog into more advanced manufacturing. Linda Rouse O'Neill, vice president of government affairs for the Health Industry Distributors Association, said tariffs aren't just going to be an economic drag on the healthcare system. "It's really going to exacerbate product shortages," she said. "We already don't have enough personal protective equipment."

Trade groups representing the apparel, steel, grain and chemical industries largely agree that China is flouting World Trade Organization rules for trade, but there remains some debate over whether the use of tariffs is necessary. "I think somehow imagining that China after 17 years of noncompliance with WTO rules will somehow reverse and do it is the definition of insanity," said Scott Paul, president of the Alliance for American Manufacturing, which represents U.S. steelworkers. "We're sitting on an economy where corporations are getting $1.5 trillion in tax cuts, we have pretty robust economy growth, so in a lot of ways there's never been a better way to fight a trade war and this is a very targeted war," Paul said, speaking as a panelist at a May 17 Washington International Trade Association event.

Chinese drugmakers and device makers, U.S. device makers that import Chinese components, and the distributors who sell supplies to hospitals and government agencies all asked the Section 301 panel to spare the healthcare sector from 25 percent tariffs on Chinese imports. The testimony came on the last of three days of hearings by the Office of the U.S. Trade Representative as the panel works to refine a list of 1,300 tariffs on $50 billion worth of Chinese goods. Witnesses said these Chinese items do not necessarily follow China's industrial policy of forced tech transfer or its efforts to leapfrog into more advanced manufacturing. Linda Rouse O'Neill, vice president of government affairs for the Health Industry Distributors Association, said tariffs aren't just going to be an economic drag on the healthcare system. "It's really going to exacerbate product shortages," she said. "We already don't have enough personal protective equipment."

A wide range of industries asked to be spared -- or protected -- in the first day of a U.S. Trade Representative office hearing on the proposed Chinese tariffs that to include more than 120 companies, a major union and many trade associations in sessions that run through Thursday. The agency will refine the list of products subject to 25 percent tariffs over China's alleged unfair trade practices. In testimony through Tuesday, Best Buy and Roku were among many opposing full-on IP tariffs. Mike Mohan, chief merchandise officer at Best Buy, dismissed the argument of General Counsel David Baer of TV maker Element Electronics, which supports keeping the proposed tariffs on finished TV sets from China. Tariffs could raise retail prices as much as 23 percent, Mohan said. Chas Smith of Roku, which employs 800 of its 900 worldwide employees in the U.S., said if fewer TVs are bought because of price increases from the tariffs, that will harm its ability to add more users. That won't just cut licensing fees from its Chinese manufacturing partners but also advertising and content distribution revenue, the hearing was told.

A wide range of industries asked to be spared -- or protected -- in the first day of a U.S. Trade Representative office hearing on the proposed Chinese tariffs that to include more than 120 companies, a major union and many trade associations in sessions that run through Thursday. The agency will refine the list of products subject to 25 percent tariffs over China's alleged unfair trade practices. In testimony through Tuesday, Best Buy and Roku were among many opposing full-on IP tariffs. Mike Mohan, chief merchandise officer at Best Buy, dismissed the argument of General Counsel David Baer of TV maker Element Electronics, which supports keeping the proposed tariffs on finished TV sets from China. Tariffs could raise retail prices as much as 23 percent, Mohan said. Chas Smith of Roku, which employs 800 of its 900 worldwide employees in the U.S., said if fewer TVs are bought because of price increases from the tariffs, that will harm its ability to add more users. That won't just cut licensing fees from its Chinese manufacturing partners but also advertising and content distribution revenue, the hearing was told.

There's no true TV manufacturing in the U.S., so TVs don't belong on a list of products targeted for 25 percent tariffs designed to hurt Chinese producers without harming end U.S. consumers, representatives of Best Buy and TCL said Tuesday. They were among a wide range of companies and industries asking to be spared -- or protected -- in the first of three days of U.S. Trade Representative's office hearings that will listen to testimony from more than 120 companies, a major union and many trade associations. The USTR's office will refine the list of products subject to 25 percent tariffs over China's intellectual property issues on what amounted to $50 billion in imports last year. "Assembling is not manufacturing," said Jonathan King, vice president-legal affairs at TCL's North American subsidiary. The idea that a domestic TV production industry could quickly emerge here isn't feasible, he said. His remarks were in apparent reference to Element Electronics, whose general counsel, David Baer, testified later Tuesday that his company assembles LCD TVs in a plant in Winnsboro, South Carolina, and has been doing so since 2014. Element supports the USTR's inclusion of finished flat-panel TVs from China on the tariff list, though it wants LCD panels, which Element sources from China, left off, he said. Element pays a 4.5 percent duty on LCD panels imported from China. That leaves Element at an unfair advantage because finished TVs imported from China bear a lower 3.9 percent royalty and finished sets imported from Mexico carry no duty at all under the North American Free Trade Agreement, he said. Baer said the USTR needs to look beyond China, as Chinese factories are already shipping subassemblies to Thailand and Vietnam, which haven't previously made TVs, and to Mexico, which does. If the government doesn't stop that shift in production among companies seeking the circumvent the tariffs, the agency's Section 301 remedies "would be a toothless tiger," he said. Element made many of those same points in comments it filed Friday in docket USTR-2018-0005 (see 1805140040). Mike Mohan, chief merchandise officer at Best Buy, dismissed Baer's arguments. Tariffs could raise retail TV prices as much as 23 percent, affecting those at the lower end of the market who shop smaller screens the most, he said. Best Buy sources virtually all its private-label Insignia-brand TVs from China (see 1804040023).

More than 1,000 of the 1,300 tariff lines on the list of products that could be affected by Section 301 tariffs would impact General Electric's operations, but the company is asking for just 34 items to be removed from the list. On May 16, during the second day of the International Trade Commission's public hearing to help it refine the list of products subject to 25 percent tariffs, Karan Bhatia, who leads GE's government affairs and policy office, suggested the committee exclude intra-company inputs from owned and controlled Chinese factories because those don't involve forced technology transfer, something the Section 301 tariffs are meant to address. He suggested items that have high U.S. content by value that come from China also should be excluded.

More than 1,000 of the 1,300 tariff lines on the list of products that could be affected by Section 301 tariffs would impact General Electric's operations, but the company is asking for just 34 items to be removed from the list. On May 16, during the second day of the International Trade Commission's public hearing to help it refine the list of products subject to 25 percent tariffs, Karan Bhatia, who leads GE's government affairs and policy office, suggested the committee exclude intra-company inputs from owned and controlled Chinese factories because those don't involve forced technology transfer, something the Section 301 tariffs are meant to address. He suggested items that have high U.S. content by value that come from China also should be excluded.

International Trade Today is providing readers with some of the top stories for May 7-11 in case they were missed.

Healthcare trade associations and companies will testify on May 17 about the effects of a proposed new 25 percent tariff on a wide range of imports of China goods, according to a schedule posted by the Office of the U.S. Trade Representative. The proposed list of tariff subheadings targets pharmaceuticals, medical devices and optical equipment, among other products. Hearings began on May 15 at the International Trade Commission.