U.S. Targets $200 Billion of Chinese Products for Additional 10 Percent Tariff

On July 10, 2018, the U.S. Trade Representative (USTR) released another notice in the ongoing trade dispute with China proposing a new list of imports from China, worth approximately $200 billion, that could be subject to an additional 10 percent tariff.

The newest list continues the Trump administration’s remedies pursuant to the USTR’s Section 301 investigation regarding “China’s acts, policies and practices related to technology transfer, intellectual property, and innovation” that were determined to be “unreasonable and discriminatory, and a burden to U.S. commerce.” As noted in our previous client alert, President Trump directed USTR to identify $200 billion of additional Chinese imported goods that would be subject to this 10 percent tariff in response to China's retaliation against U.S. tariffs implemented by USTR on June 15, 2018.

In response to the President's actions, China’s Commerce Ministry promised that Beijing will continue to fight back with qualitative and quantitative measures if such additional tariffs are implemented. In turn, President Trump threatened that if China increases tariffs again in retaliation for the latest move, the U.S. “will meet that action by pursuing additional tariffs on another $200 billion of goods.” If tensions continue to escalate, as it stands, the U.S. will target $450 billion worth of Chinese imported products, which may effectively cover all imports from China.

USTR claims that this newest list was developed by trade analysts who considered products from across all sectors of the Chinese economy. The subheadings included in this list also contain those that commenters suggested for inclusion in response to previously proposed lists.

As with previous lists proposed by USTR, this list will undergo a notice and comment period in which the public and other stakeholders will have the opportunity to voice their opinions.

Notice and Comment Period for the Proposed List

Pursuant to Section 304(b) of the Trade Act, these tariffs may only go into effect after a notice and comment period. Interested parties may present arguments on which products should be removed from, or remain on, the list and why. The notice and comment period due dates are below.

• July 27, 2018: Due date for filing requests to appear and a summary of expected testimony at the public hearing, and for filing pre-hearing submissions.
• August 17, 2018: Due date for submission of written comments.
• August 20–23, 2018: Public hearing at the U.S. International Trade Commission (500 E Street SW, Washington, D.C., 20436 beginning at 9:30 a.m. ET).
• August 30, 2018: Due date for submission of post-hearing rebuttal comments.

USTR is requesting comments on whether specific tariff subheadings in this list should be kept or removed from the list; whether subheadings not on this list should be added; the level of increase, if any, in the rate of duty; and the appropriate aggregate level of trade to be covered by additional duties. USTR is also asking commenters to address whether these additional duties will be “be practicable or effective to obtain the elimination of China’s acts, policies, and practices, and whether maintaining or imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers.”

In order to appear at the August 20–23 public hearing, a party must submit its request to appear by July 27. Such a request must include a summary of the testimony and may be accompanied by a pre-hearing submission. The remarks at the hearing may be no longer than five minutes.

Companies with products identified in this list, as well as those companies and investors that have interests in China, or may be contemplating potential tie-ups or investments with Chinese companies, should consider commenting on these proposed additional duties. As the dates detailed above are fast approaching, it is important that companies organize quickly to submit comments and to prepare for the USTR hearing.

Drinker Biddle’s Customs and International Trade team has extensive experience navigating public comments, having successfully removed certain tariff lines from the initial proposed list. For further information, contact members of the Customs and International Trade team listed below.