Tariffs Risk Weakening US 5G Leadership, ‘Relative to China,’ Warns TIA
The Trump administration’s proposed Trade Act Section 301 tariffs on Chinese goods imported to the U.S. under the Harmonized Tariff Schedule’s 8517.62.00 subheading targets equipment “critical for the build-out of high-speed broadband internet” and related IoT technologies, said the Telecommunications Industry Association in comments posted Saturday in docket USTR-2018-0026. The comments were filed July 27, when 10 percent tariffs were still on the table, days before U.S. Trade Representative Robert Lighthizer announced he will “consider” hiking the duties to 25 percent (see 1808010018).
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Imposing “a new tax” on goods imported from China under HTS 8517.62.00 “stands to slow the U.S. adoption of internet technology that depends on networking hardware to function,” said TIA. “Because telecom networks are so important to productivity, and raising the price of internet infrastructure would make it more expensive for companies to upgrade their networking technology, we believe the proposed tariffs would have a negative impact on the U.S. business sector.” Tech interests are increasingly focusing their opposition on HTS 8517.62.00 as the one line item on which tariffs, they say, could disrupt the IoT ecosystem because it includes servers, gateways and modems, plus ubiquitous consumer products such as Bluetooth headsets, speakers, fitness trackers and smartwatches.
TIA has concerns that tariffs on “core networking products” under HTS 8517.62.00 will risk weakening America’s “technological strength and economic competitiveness relative to China,” it said. The Chinese government vows to “actively fund and promote the growth of the industrial internet,” plus 5G and artificial intelligence inside China, it said: “In a period when technology is an increasingly important determinant of global competitiveness, it is all the more important that American policymakers refrain from actions that would needlessly raise the price of network infrastructure in the United States.”
The California Association of Port Authorities worries that as much as 20 percent of the “containerized cargo” imported to the U.S. through California ports could be “exposed” to the third round of tariffs, it said in July 26 comments posted Thursday. “This cargo represents approximately $63.6 billion of trade value,” said the association, which represents 11 California ports. “As the primary gateway for trade with the Pacific Rim, California ports are monitoring current U.S. trade discussions -- and related tariffs and retaliatory tariffs -- with significant concern.”
The cargo that flows through California ports “includes goods that you will find on store shelves across the nation,” said the association. “Importantly, this cargo also includes supplies to U.S. manufacturers and exporters of U.S. goods to markets around the world.” It estimates more than half the nation’s imports “go to U.S. manufacturers,” it said. “Attempts to protect American jobs by implementing tariffs could negatively impact U.S. manufacturers that have established globalized supply chains.” It said more than 250,000 “direct and indirect jobs could be at risk nationally” if the tariffs go through.