Dear Valued Customer:

Trump Signs Section 301 Tariffs on Certain Imports From China

President Donald Trump just signed the Section 301 tariff action on some $50 – 60 billion of Chinese imports, the first shot in what could become a contentious global trade war. Trump is asking China to immediately reduce the trade surplus by $100 billion.

On August 18, 2017 Trump initiated the investigation under Section 301 of the Trade Act of 1974 into the government of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.

The United States Trade Representative’s office stated that the United States is committed to rebalancing the U.S.-China trade relationship to achieve more fair and reciprocal trade. Following a thorough analysis of available evidence, USTR, with the assistance of the interagency Section 301 committee, prepared findings showing that the acts, policies, and practices of the Chinese government related to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce, resulting in harm to the U.S. economy of at least $50 billion per year.

“We have a trade deficit of $504 billion, depending on how you calculate it,” Trump adds, “With the U.S. importing about $500 billion in goods from China annually, it amounts to a tariff on just 10% of items the U.S. buys, rather than a 10% across-the-board tariff.”

The administration is acting due to practices it says amounts to years of stealing the intellectual property of American companies. China has said it is prepared to retaliate with “necessary measures.”

The U.S. has a preliminary list of more than 1,000 products that can be targeted, and will also look to bring licensing complaints to the World Trade Organization. The USTR will propose additional duties of 25% ad valorem on certain products of China, with an annual trade value commensurate with the harm caused to the U.S. economy resulting from China’s unfair policies. The proposed product list subject to the tariffs will include aerospace, information and communication technology, and machinery.

The USTR plans to publish a proposed list of products subject to additional tariffs within 15 days. The list will be set out in a Federal Register notice seeking a 30-day public comment period on the proposed tariff action. When the comment review analysis process is completed, USTR will announce the final determination on tariff action and will publish the product list in the Federal Register.

The USTR’s Section 301 Fact Sheet can be found here.

James J. Boyle & Co. will continue to monitor developments of the Section 301 measure to keep our customers apprised.

Thank you for your attention and cooperation. If you have any questions, please contact your nearest JJB representative.

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