Avoid Tariffs That Could Harm Many Americans, 34 House Members Urge USTR
U.S. Trade Representative Robert Lighthizer should “do everything possible” to address China’s allegedly unfair trade practices without “imposing tariffs” or enacting measures that “might harm large numbers" of U.S. workers, consumers and businesses, said a Wednesday letter signed by 34 House Democrats and Republicans and released Thursday. The letter to Lighthizer comes before the USTR's office releases its final list of duties by June 15 and a day after the White House announced its decision to proceed with the tariffs on Chinese imports (see 1805290046).
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The “challenge” facing the U.S. is “how best to engage with China in order to secure desired changes,” said the lawmakers. “We do not believe that the current cycle of threatened tariffs between the United States and China will secure optimal results, and are concerned that there will be significant unintended adverse consequences.” They worry that “even the mere threat of tariffs can diminish U.S. economic growth, competitiveness, and exports," they said.
Legislators already are “hearing from our constituents that they could be facing higher costs, reduced production, disruptions in supply chains and lost sales” under the tariffs, said the lawmakers. They worry "imposition of these tariffs on everyday consumer products would amount to a de facto tax increase,” they said. They cited the recent CTA-National Retail Federation study (see 1804170013) that found that 25 percent tariffs on finished TV imports from China would cost U.S. consumers $711 million in higher product costs in the first year.
There are many other tools "to achieve our shared objectives,” the lawmakers told Lighthizer. “We urge you to work as closely as possible with our allies who share our concerns about China’s unfair trade practices, and have begun to address these practices more directly thanks to US leadership. We should avoid creating disincentives for our allies to join us in taking strong action." The lawmakers think the "most effective approach is for the international community, and not the United States alone, to stand up to China's unfair trade practices,” they said. Lighthizer’s office didn’t comment Thursday.
CTA President Gary Shapiro hailed the bipartisan letter for stressing "the importance of avoiding unstable trade policy." U.S. businesses "need certainty and not the disruption of an off-again, on-again trade war with China, which is going to hurt the global supply chain," said Shapiro. The consumer tech industry is beginning its planning for the holiday selling season, "and the high level of uncertainty makes business decisions risky and challenges sourcing and selling," he said. "Americans will bear the brunt of the consequences with higher consumer prices and fewer jobs" if tariffs are imposed, he said.
Lighthizer met with the trade ministers of Japan and the EU in Paris Thursday and “confirmed their shared view that no country should require or pressure technology transfer from foreign companies to domestic companies” through the use of joint-venture requirements, licensing processes and “other means,” they said. The ministers discussed “the harmful effects of regulatory measures that force foreign companies seeking to license technologies to domestic entities to do so on non-market-based terms that favor domestic entities,” they said.
The trade officials also explored the need “to establish and share best practices” to thwart government practices that “unfairly facilitate the systematic investment in, and acquisition of, foreign companies and assets to obtain technologies and intellectual property and generate the transfer of technology to domestic companies,” they said. The ministers “condemned government actions that support the unauthorized intrusion into, and theft from, the computer networks of foreign companies to access their sensitive commercial information and trade secrets and use that information for commercial gain,” they said.
Such policies and practices “create unfair competitive conditions for our workers and businesses, hinder the development and use of innovative technologies, and undermine the proper functioning of international trade” and should be stopped through “effective means,” including dispute settlement proceedings at the World Trade Organization, said the ministers. Lighthizer’s Trade Act Section 301 investigative report in March said China’s “technology transfer regime” is a “persistent problem for U.S companies in China, particularly in high-tech sectors targeted by the Chinese.”
It was partially on the basis of that finding that the Trump administration proposed 25 percent tariffs on $50 billion worth of Chinese imports. The same day Lighthizer met with EU and Japanese trade officials in Paris, President Donald Trump ordered tariffs on steel and aluminum imports from Canada, the EU and Mexico.