Section 301 Tariffs Would Hit Retailers, Smart Thermostat Makers, Trade Groups Say
U.S. companies are “market leaders” in development and sale of smart thermostats, and would be the hardest hit if the Trump administration imposes 25 percent tariffs on Chinese imports, the Advanced Energy Management Alliance said in comments posted May 10. The alliance, whose members include green energy services providers, but also Nest, Tesla and Walmart, wants the Office of the U.S. Trade Representative to remove automatic thermostats in HTS subheading 9032.10.00 from its list of products targeted for the tariffs, it said. Chinese companies “do not have a meaningful presence in the U.S. market” for smart thermostats, it said. “Therefore, if USTR were to impose duties on smart thermostats, the impact of the duties would fall primarily on U.S. companies. In addition to the harm this would cause to the U.S. companies and their American workers, the additional duties would increase prices for the millions of U.S. families who rely on smart thermostats to control their energy costs and [would] discourage their use.”
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The tariffs also would harm the “small and medium-sized U.S. businesses that sell and install thermostats,” and would “disrupt the efforts that utility companies and others have undertaken to use technologically advanced smart thermostats to meet energy efficiency targets,” the alliance said. The tariffs also would “undermine U.S. innovation in this space,” it said. The alliance thinks it’s “unlikely” tariffs would be “practicable or effective” in eliminating unfair Chinese acts, policies and trade practices the USTR’s office is targeting, “because the market leaders in this product category are U.S. and other non-Chinese companies,” it said.
Joint comments from a wide range of other trade associations pushed against the Section 301 tariffs. "The Administration’s consideration of unilateral tariffs" does not "account for the role of the global supply chain in product production and assembly," said the associations, including the Consumer Technology Association, the National Customs Brokers & Forwarders Association of America and the Telecommunications Industry Association. "As a result of global supply chains, a product marked as originating in China actually reflects manufactured and other inputs coming from the United States and many other countries. Increasing the costs of U.S. imports from China will also negatively impact U.S. exports of key inputs to China incorporated
into those imports."
The Chamber of Commerce also raised concerns in its comments. Specifically, it said its members are worried about the increased costs for working families due to increased tariffs on "water filters (HTS 84212100), air purifiers (HTS 84213980), scanners (HTS 84716080), flash drives (HTS 84717060), video projectors (HTS 85287110), handheld radios (HTS 85256010), portable generators (HTS 85021100), remote controls (HTS 85269250), vacuum sealers (HTS 84223091), ink cartridges (HTS 84439925), thermostats (HTS 9032100) and mini fridges (HTS 84186901)."
Meanwhile, a group of retailer and clothing trade groups sought to pre-empt the addition of consumer products to any additional list of Chinese imports targeted with Section 301 tariffs. "We were pleased to see that such goods were excluded from the original list of items that was published early last month," said the group, which included the U.S. Fashion Industry Association, the Travel Goods Association and the Outdoor Industry Association. "We support that move and remain staunchly opposed to the potential inclusion of any of these items on that list or any future lists that may be developed," the associations said in May 11 comments.
The administration should consider that the tariffs on many "consumer products, such as clothing, shoes, home goods, fashion accessories, or travel goods from China" is already high, the groups said. "China accounted for about 41% of all apparel, 72% of all footwear, and 84% of all travel goods imported into the United States," they said. "Because duty rates in these product categories are so high and because China is such a dominant supplier, U.S. imports from China already account for most of duties collected" by the government. Several of the groups already commented in the proceeding regarding the original list of products.
Comments are due May 11, and a hearing on the proposed tariffs is scheduled for May 15 (see 1804160024). The deadline for comments to rebut statements made at the hearing is May 22.