As reported in a prior post, the United States on July 6, 2018 began imposing 25 percent tariffs on approximately $34 billion worth of Chinese products imported into the United States. This was the result of the Office of the U.S. Trade Representative (USTR) undertaking a Section 301 investigation into “China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.” Shortly after these tariffs were implemented, China retaliated by imposing tariffs on $34 billion worth of U.S. exports to China. In response, U.S. Trade Representative Robert Lighthizer announced yesterday, July 10, 2018, “As a result of China’s retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports.” He added, “For over a year, the Trump Administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition. We have been very clear and detailed regarding the specific changes China should undertake. Unfortunately, China has not changed its behavior – behavior that puts the future of the U.S. economy at risk. Rather than address our legitimate concerns, China has begun to retaliate against U.S. products. There is no justification for such action.”

While the USTR is also in the process of considering a 25 percent tariff on another list of Chinese products worth $16 billion (see Trump and Trade Updates of June 18, 2018 and June 20, 2018), the agency will now begin a third round of review to consider the imposition of the 10 percent tariff on an additional $200 billion worth of imports of China. While a formal notice will be published in the Federal Register in the near future, a pre-publication version of the notice and the proposed list of 6,031 Harmonized Tariff Schedule (HTS) categories is available here. In selecting these proposed HTS categories, USTR staff took account of likely impacts on U.S. consumers and involved the removal of subheadings identified by analysts as likely to cause disruptions to the U.S. economy, as well as tariff lines subject to legal or administrative constraints. The list captures a wide range of products, including food, chemicals, pesticides, minerals, fabrics, construction materials, handbags, luggage, car parts, appliances, machines, televisions, items made from steel and aluminum, batteries, semiconductor assemblies and furniture.

In the notice, the USTR is seeking public comments on its proposed action against China of an additional 10 percent ad valorem duty on products of China with an annual trade value of approximately $200 billion. The USTR’s Section 301 Committee will hold a public hearing on this matter from August 20-23, 2018. Requests to appear and testify at the hearing are due by July 27, 2018. Any desired pre-hearing submission is also due on this date. The deadline for filing any written comments is August 17, 2018; and the deadline for filing any post-hearing rebuttal comments is August 30, 2018. The docket number for this proceeding is USTR-2018-0026. The request to appear at the hearing and all related submissions must be made through the Federal eRulemaking Portal.

China’s Ministry of Commerce has stated that this latest action by the Trump administration is “totally unacceptable” and indicated that it would impose further countermeasures and take all appropriate actions at the World Trade Organization.