US tariffs target Chinese industrial products

Washington – The US government on 15 June released two lists of products covered by $50 billion worth of tariffs on Chinese imports, including components purchased by suppliers for domestic production of automotive vehicles.

The 25% tariffs are an attempt to stop China from forcing foreign companies to transfer technology to joint venture partners, and also an attempt to deter cybertheft of intellectual property by Chinese government and companies.

China has published its own list of threatened tariffs on $50 billion in US goods, including soybeans, aircraft and autos, and has said it would hit back if Washington followed up with further measures.

"We must take strong defensive actions to protect America's leadership in technology and innovation against the unprecedented threat posed by China's theft of our intellectual property, the forced transfer of American technology, and its cyber attacks on our computer networks," US trade representative Robert Lighthizer said in a statement.

"China's government is aggressively working to undermine America's high-tech industries and our economic leadership through unfair trade practices and industrial policies like 'Made in China 2025.' Technology and innovation are America's greatest economic assets and president Trump rightfully recognises that if we want our country to have a prosperous future, we must take a stand now to uphold fair trade and protect American competitiveness."

The move comes amid escalating global trade tensions as the Trump administration picks fights with allies and other trading partners to protect domestic industries. China and other countries have threatened to retaliate against various US tariffs they say violate World Trade Organization rules.

The business community and most experts say the tariffs are misguided and will hurt the US economy, but in there is agreement that action is necessary in China's case to thwart unfair trade practices. Critics, however, say the better approach is to work on a collaborative strategy with a coalition of partner nations that have similar grievances with China rather than go it alone.

"Imposing tariffs places the cost of China's unfair trade practices squarely on the shoulders of American consumers, manufacturers, farmers, and ranchers. This is not the right approach," US Chamber of Commerce President Thomas Donahue said in a statement.

The list of products issued June 15 covers 1,102 distinct products focused on industrial sectors that contribute to or benefit from China's industrial policies, including aerospace, information and communications technology, robotics, industrial machinery, new materials and automobiles. The list does not include goods commonly purchased by American consumers, such as cell phones or televisions.

The first list contains 818 products covering about $34 billion worth of imports, with tariffs effective 6 July.

The second set contains 284 proposed tariff lines identified by an interagency committee as benefiting from Chinese industrial policies. These products, worth about $16 billion, will undergo further review and a public comment process before the USTR issues a final determination. Products on this final list could be subject to additional duties.

The USTR's original list included 1,333 proposed products subject to tariff.

The USTR said it will set up a process in several weeks for companies that can't find certain products in the U.S. to request an exclusion from the tariffs, as it has done with recent steel and aluminium tariffs.

Auto suppliers have decried the tariffs, which were first proposed in March after a USTR investigation. Mary Buchzeiger, owner of door-hinge maker Lucerne International, testified at a public hearing last month that the tariffs could put her company out of business by raising costs too high.

(ERJ lead image source: VMDA release)