On July 24-25, 2018, the Office of the United State Trade Representative (USTR) held public hearings regarding proposed tariffs on approximately $16 billion of Chinese products.

Rebuttal comments are due on Tuesday, July 31, 2018.

The list identifying these products (also known as “List 2”) was released last month and represents 284 new tariff lines identified by the interagency Section 301 Committee as “benefiting from Chinese industrial policies, including the “Made in China 2025” industrial policy.”

Section 301 For covered products in List 1, please click here. 25% 7/6/2018
For covered products in List 2, please click here. TBD TBD
For covered products in List 3, please click here and see Annex 10% TBD
Status: List 1 totaling $34 billion worth of imports is composed of 818 tariff lines, and went into effect on 7/6/2018.

List 2 totaling $16 billion worth of imports is composed of 284 proposed tariff lines identified by the interagency Section 301 Committee. This was the subject of the hearings.

List 3 includes a list of tariff lines of products from China with an annual trade value totaling approximately $200 billion. These are also subject to a public review process.

The Committee heard testimony from over 80 witnesses on whether to include certain tariff lines in List 2. The witnesses represented trade organization and corporations of all sizes. The USTR intends to publish a transcript of the hearing, but did not provide a date.

Most of the witnesses requested that the Committee remove specific tariff lines from the list. The most common justifications were as follows:

  • The United States has a trade surplus in a particular good, and the 301 duties would harm that industry;
  • The increased duties would:
    • lead directly to the loss of U.S. manufacturing jobs;
    • lead directly to an increase in the price of goods to the U.S. consumer; and
    • would have no effect on China’s intellectual property practices;
  • The goods targeted on List 2:
    • are only available from China; and
    • are not relevant to the “Made in China 2025” program.

Witnesses who supported the Section 301 duties asserted that they were necessary to protect U.S. manufacturing concerns and that sufficient capacity existed in the United States to manufacture the listed products.

The Committee asked questions of the witnesses when their testimony was complete. The questions fell into several broad categories:

  • Would the Section 301 duties affect the cost and availability of medical devices?
  • Why isn’t current U.S. manufacturing capacity available to meet U.S. demand?
  • Are the listed goods available from non-Chinese foreign suppliers?
  • How long would it take to increase production in the U.S., or to requalify a new non-Chinese supplier?

 

When preparing rebuttal comments, the Committee’s questions to the witnesses should be considered.