Last Friday, the Trump administration released the list of imported products from the People’s Republic of China (PRC) that will be subject to an additional 25 percent tariff. The retaliatory tariffs are the result of (1) the U.S. government’s Section 301 investigation and report that assessed the PRC government’s intellectual property and technology transfer practices affecting U.S. companies and (2) the PRC government’s reluctance to address these U.S. government concerns so far. Tariffs on these products are scheduled to go into effect July 6.
The Section 301 investigation process, which included a public notice and comment period and hearing, reduced the first set of product lines under consideration from 1,333 U.S. Harmonized Tariff Schedule (HTS) line items to 818, worth approximately $34 billion in U.S. imports from China. In its Friday announcement, the Office of the U.S. Trade Representative also announced that an additional 284 HTS line items worth $16 billion in U.S. imports from China may be subject to the 25 percent tariff and would undergo further scrutiny as part of a public notice and comment process, including a public hearing. The second set of HTS line items includes, among others, products benefiting from PRC industrial policies, including the “Made in China 2025” program, which is an industrial strategy aimed to shift China’s economy into higher value-added manufacturing sectors, such as robotics, aerospace and energy-saving vehicles.