Last Friday, Donald Trump’s administration released a statement announcing a 25 % tariff on $50 billion of goods from China and published two lists: a finalized list of 818 entries subject to the tariff beginning July 6, and another list of 284 additional entries for review and comment.
The decision follows a Section 301 investigation conducted by the Office of the U.S. Trade Representative into China’s acts, policies and practices related to technology transfer, intellectual property and innovation, the Auto Care Association said in its Capital Report.
The products announced have been “identified by the interagency Section 301 Committee as benefiting from Chinese industrial policies, including the ‘Made in China 2025’ industrial policy.”
The administration will provide an opportunity for the public to request exclusion of a particular product from the additional 25% duty. Additional details regarding the second list review process and exclusion process will be released in a Federal Register notice.
The president’s announcement also states that the administration will pursue additional tariffs if China engages in retaliatory measures, including new tariffs on U.S. goods or other trade barriers.
The Auto Care Association says it supports the administration’s efforts to protect U.S. intellectual property but is deeply disappointed that the White House “failed to evaluate the economic harm to the cost of repair and maintenance on family autos and the unintended consequences of trade restrictions on the average American family.”
The MOtor Equipment and Manufacturers Association (MEMA) also applauded the administration’s continued focus to protect intellectual property but said it opposes using tariffs to curb intellectual property theft. MEMA believes that retaliatory tariffs could negate the Trump administration’s recent successful work on behalf of American companies, such as tax reform.
In a statement, the association said, “The tariffs are taxes that hurt U.S. companies, put jobs at risk and negatively impact consumers. In May, MEMA testified before the United States Trade Representative (USTR) against these tariffs. During its testimony, MEMA highlighted that IP theft protections are critical but argued tariffs on motor vehicle parts manufacturers will be ineffective in obtaining these goals. To the contrary, such prohibitively high tariffs on these products will disproportionately harm U.S. businesses, including the motor parts and equipment manufacturers MEMA represents.
“Motor vehicle parts manufacturers conduct almost one-third of the annual $18 billion investment by the automotive industry in research and development, and for decades MEMA has advocated for strong global protections of IP investments. Given this investment in innovation, intellectual property rights protection is critical to the sustained success of the motor vehicle parts manufacturing industry. Motor vehicle parts are particularly vulnerable to counterfeiting and IP theft activities. Strong IPR protections are needed to encourage companies to support important research and development investment and to foster innovation as IPR owners are provided certainty that their inventions and technological advancements will be safe from infringers.
“Tariffs are not the solution to this substantial and growing problem. Instead, MEMA supports stronger bilateral engagement, where China and the U.S. work together to protect the valuable IP of our members, or the U.S. leveraging the powerful relationships we have with other trading partners to pressure China to enforce their own IP laws and comply with international IP laws and regulations,” MEMA’s statement concluded.
Last month, President Trump initiated a Section 232 investigation to determine if the imports into the U.S. of automobiles, including SUVs, vans and light trucks, and automotive parts, threaten to impair national security.
The Federal Register notice outlines a comment and hearing process for interested parties to submit/present information pertinent to the investigation. Comments are due by this Friday, June 22.
The Auto Care Association says the administration is interested in comments and information that address the quantity and nature of auto and auto part imports, the existing and anticipated availability of resources for production and the impact of foreign competition on the economic welfare of the U.S. auto and automotive parts industry.
The Department of Commerce will recommend actions if it is determined that automobiles and/or automotive parts are being imported into the U.S. in quantities that threaten to impair national security.
To submit comments you can email the Auto Care Association or visit www.regulations.gov.
