The “same concerns” that led the Trump administration to remove smartwatches and fitness trackers from the List 3 Section 301 tariffs on Chinese imports in September “continue to apply” with the proposed fourth tranche, commented Fitbit in docket USTR-2019-0004. Imposing 25 percent tariffs would cause Fitbit “significant and unavoidable economic harm," it commented.
Section 301 (too broad)
Specialty speaker brand SVS Sound is “very serious” about “investigating” the sourcing of finished products from Thailand or the Czech Republic if the List 4 Section 301 tariffs take effect on Chinese imports, but doesn’t yet know of the financial ramifications, CEO Gary Yacoubian said in a June 20 interview. The proposed List 4 tariffs would be “devastating” to SVS because they would affect 100 percent of its product line, Yacoubian commented in docket USTR-2019-0004. Yacoubian previously served as chairman of the Consumer Technology Association, when it was named the Consumer Electronics Association.
The Office of the U.S. Trade Representative will begin accepting exclusion requests for the third tranche of Section 301 tariffs through a new portal on June 30 at noon, the agency said in a notice. The exclusion requests will be due through the portal at exclusions.ustr.gov/ by Sept. 30, with responses due 14 days after the request is posted on the portal, USTR said. Exclusions will be effective going back to Sept. 24, 2018, when the tariffs on $200 billion in goods from China were implemented with a 10 percent tariff.
The proposed List 4 Section 301 tariffs cover “all of Apple’s major products,” and would harm the company’s “global competitiveness,” the iPhone maker said in heavily redacted comments posted June 20 in docket USTR-2019-0004. “The Chinese producers we compete with in global markets do not have a significant presence in the U.S. market, and so would not be impacted by U.S. tariffs,” Apple said. “A U.S. tariff would, therefore, tilt the playing field in favor of our global competitors.” Tariffs also would reduce Apple’s “U.S. economic contribution,” it said. It vowed last year “to make a total direct contribution to the U.S. economy of over $350 billion over 5 years and we are pleased to report that we are on track to achieve this contribution,” the company said in the filing.
The Office of the U.S. Trade Representative created a new site meant to help importers navigate the Section 301 tariff process. The page describes some basics of the Harmonized Tariff Schedule, and has an HTS number search feature to help determine if a product is subject to the tariffs.
The Office of the U.S. Trade Representative will not automatically renew Section 301 product exclusions, USTR Robert Lighthizer told Rep. Jackie Walorksi during the June 19 House Ways and Means Committee hearing on the administration's trade policy. But Lighthizer told a California Democrat that his office is hiring employers and contractors and borrowing "a bunch of people" from other agencies to work on the flood of product exclusion requests that's expected.
Despite three rounds of Section 301 tariffs and the threat of a fourth, “very few customers are moving existing production out of China,” CEO Mark Mondello of supply-chain services provider Jabil said on a fiscal year Q3 earnings call June 18. The “deep-rooted, mature supply chain that's foundational to China” has most customers staying put, he said. Many also “don't see a reasonable payback” from shifting sourcing elsewhere, plus “a decent percentage” of their Chinese production is “for final consumption in geographies other than the United States,” he said. Some customers have decided “to ramp some of their new products” in countries of origin other than China, he said. “I think that's really healthy. It's really good for us because it continues to help us balance factories and factory loading.” Mondello wants “things to get settled, and settled as soon as possible, between the U.S. and China,” he said. “If things got really, really bad, either short-term or long-term, I think it's going to be tough on everybody, us included, but let's hope that that doesn't occur.”
Ricoh Americas is “currently assessing the potential impact” of the proposed List 4 Section 301 tariffs of up to 25 percent “on nearly all remaining goods manufactured in China and imported to the U.S.,” the vendor emailed in an announcement to business customers on June 17. “The government-proposed tariff increases are not specific to Ricoh and span far beyond our industry,” it said. “Be confident that we continue to review and optimize our global supply chain to minimize the potential impact for both Ricoh and your organization wherever possible.” While Ricoh will do its best to mitigate any impact, “it is possible that the outcome cannot be avoided, and we anticipate there may be some impact to pricing,” the vendor said. “If, despite our efforts, there becomes a need to increase pricing for new purchases, we will work with you to create solutions that optimize cost, delivery, and value.”
U.S. Trade Representative Robert Lighthizer faced criticism about President Donald Trump's China policy, which both Democrats and Republicans noted is hurting U.S. businesses and, if tariffs come on List 4, will dearly cost U.S. consumers. Lighthizer, who was testifying June 18 at the Senate Finance Committee about the administration's trade policy, said there's been no decision on whether there will be tariffs on another $300 billion in Chinese imports. "The president will make that decision in the next few weeks," he said, and if tariffs are levied, there will be an exclusion process. "We think we have been fair in granting exclusions," he said.
Companies large and small, new and more than a century old all told government officials to keep apparel and footwear off the fourth list of Section 301 tariffs. The witnesses testified June 17, on the first of seven days of hearings from industries and trade groups about the possibility of additional 25 percent tariffs on nearly all Chinese imports that have not yet been targeted.