On
August 14 2017, the President issued a Memorandum instructing the Trade
Representative to determine whether to investigate under section 301 of the
Trade Act of 1974 (Trade Act) (19 U.S.C. 2411), laws, policies, practices, or 3
actions of the Government of China that may be unreasonable or discriminatory
and that may be harming American intellectual property rights, innovation, or
technology development.
On
August 18, 2017, after consultation with the appropriate advisory committees
and the inter-agency Section 301 Committee, the United States Trade
Representative (USTR) initiated an investigation into certain acts, policies,
and practices of the Government of China related to technology transfer,
intellectual property, and innovation.
After
USTR’s Section 301 investigation, President Trump announced in the second period
of March that the United States will impose tariffs on $60 billion dollars in
Chinese goods in response to China’s policies that stealing U.S. intellectual
property and abuse trade rules. He took the expected step yesterday.
The
Office of the United States Trade Representative (USTR) published a proposed list
of Chinese products that could be issue to additional tariffs.
The
proposed list of goods, including aerospace, information and communication
technology, robotics and machinery, would point products as a target that
benefit from China’s industrial plans while minimizing the impact on the U.S. economy.
There are approximately 1300 separate tariff lines in this list. However, this
proposed list is not taken its final shape yet.
First
of all, it will undergo further review in a public notice and comment process,
including a hearing. After completion of this process, USTR will issue a final
determination on the goods subject to the additional duties.
USTR
mentioned these comments as a summary:
“The U.S. Trade Representative (Trade
Representative) has determined that the acts, policies, and practices of the
Government of China related to technology transfer, intellectual property, and
innovation covered in the investigation are unreasonable or discriminatory and
burden or restrict U.S. commerce.
The Office of the U.S. Trade Representative
(USTR) is seeking public comment and will hold a public hearing regarding a
proposed determination on appropriate action in response to these acts,
policies, and practices.
The Trade Representative proposes an
additional duty of 25 percent on a list of products from China. The list of
products, defined by 8-digit subheadings of the Harmonized Tariff Schedule of
the United States (HTSUS), is set out in the Annex to this Notice.”
If
this proposed list becomes valid, how the technology prices would be affected
in U.S. market?
According
to many economists, global supply chain companies such as Apple, IBM, Hewlett
Packard Enterprise will raise prices for American consumers. Many believes that
this issue will occur strong reaction between American consumers because of the
fact that they got used to buy inexpensive electronics.
Considerable
amount of specialists believe that this approach will penalize U.S. consumers.
Here
some of their remarks:
Brad
Setser who is a former White House economist in the Obama administration:
“The pain will be very visible and the
potential gains will be very abstract. The administration hasnot prepared the
U.S. for the downsides of a trade war.”
-
Dean
Garfield, chief executive of the
Information Technology Industry Council:
“If history is any indication, these
proposed tariffs will not work and will be entirely counterproductive. Tariffs
penalize U.S. consumers by increasing prices on technology products and will
not change China’s behavior. Instead, the administration should act consistent
with international obligations and work with other countries to address
systemic issues with China.”
It
seems that many specialists are being annoyed with this approach.
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