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Fair trade: imports, tariffs and the textile industry

Industry News, News | April 24, 2018 | By:

In August 2017, the President formally instructed the Office of the U.S. Trade Representative (USTR) to determine whether to launch a 301 investigation of “laws, policies, practices, or 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.” After deciding to initiate an investigation, USTR also requested consultations with China; however, media reports at the time indicated that China refused to engage. Based on information obtained during the investigation, USTR prepared a comprehensive report that was released to the public in late March 2018.

On April 3, the Trump administration released its proposed list of products imported from China that could be subject to additional tariffs of 25 percent as part of the U.S. response to China’s unfair trade practices relating to the forced transfer of U.S. technology and intellectual property. While there are no textile or apparel products on the list, 47 tariff lines covering textile machinery and components are among the proposed products. This represents nearly all textile machinery and parts tariff lines, and U.S. imports from China have averaged $59 million annually in recent years in the proposed lines.

The overall product list covers an estimated $50 billion worth of goods and roughly 1,300 tariff lines. USTR’s report references China’s industrial plans related to advanced technology, and indicates that the product list is designed to target products that benefit from China’s programs while minimizing the impact on the U.S. economy and consumers.

Public comment requested

USTR is seeking public comment on its proposed actions through May 11 and will hold a public hearing on May 15. The Federal Register Notice announcing the hearing and public comment period is available here.

USTR has not indicated when it will make a decision on the final tariff list. It is possible that additional tranches of products will be considered, based on a White House statement on April 5 that the president had instructed USTR to consider $100 billion in additional tariffs. China has also threatened tariffs of its own; this remains a fluid issue.

The administration is also pursuing parallel action through the World Trade Organization (WTO). On March 23, USTR filed a request for consultations with China at the WTO to address China’s discriminatory technology licensing requirements, the first step in the WTO dispute settlement process. If the United States and China are unable to reach a solution through consultations, the United States may request the establishment of a WTO dispute settlement panel to review the matter. All actions are aimed at prompting China to change its intellectual property practices.

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