President Trump is preparing to impose a package of $60 billion in additional tariffs against China as early as this week. These tariffs come on the heels of the recent announcement of duties imposed on steel and aluminum. The new tariffs are expected to cover more than 100 commodities, potentially including apparel, footwear, furniture, and toys. The Washington Post is reporting that the duties may be assessed as early as this Friday.
The new line of tariffs on Chinese imports is in response to a Section 301 investigation ordered in August 2017. The investigation focuses on China’s policies on foreign investment and violations of U.S intellectual property rights. Section 301 of the Trade Act of 1974 is aimed at protecting U.S exporters from unfair trade practices by foreign countries. Under this section the President has discretion in determining whether to retaliate against a foreign country that violates trade agreements or engages in unfair trade practices.
The President has extremely broad retaliation powers under Section 301 which authorizes him to take any "feasible action,"' including, imposing duties or other import restrictions upon a violating country.
The current investigation is looking at whether acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation are unreasonably burdensome to U.S. commerce. Trump may respond with new restrictions if the US determines that China is pressuring companies to domicile their patents or intellectual property in China or disregard the licenses of US companies.
Trump hinted at new Section 301 restrictions on March 7, 2018 when he tweeted: “The U.S. is acting swiftly on Intellectual Property theft. We cannot allow this to happen as it has for so many years!” Numerous industry groups, including: the National Retail Federation, the American Apparel and Footwear Association, the Computer and Communications Industry Association, and the U.S. Toy Association have already filed opposition to the proposed tariff measures.
Should you have questions concerning the applicability of new tariffs on products from China, or if you wish to be placed on a watch list for future updates, please contact one of the Rock Trade Law professionals listed here.