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Section 301 Tariffs re: China Technology Transfer, Intellectual Property and Innovation issues.

 

On April 3, the USTR released its Notice on the proposed strategy to confront the discriminatory technology transfer and intellectual property practices of China which follow on the President's Memorandum of March 22. 

This Notice provides the proposed list of  1,300 separate tariff lines against which the 25% section 301 duties may be imposed on goods from China, including industries such as aerospace, information technology, communications, metals, and machinery. 

Response deadlines are as follows:

  • April 23, 2018: Due date for filing requests to appear and a summary of expected testimony at the public hearing and for filing pre-hearing submissions.
  • May 11, 2018: Due date for submission of written comments.
  • May 15, 2018: The Section 301 Committee will convene a public hearing in the main hearing room of the U.S. International Trade Commission, 500 E Street SW Washington DC 20436 beginning at 10:00 am.
  • May 22, 2018: Due date for submission of post-hearing rebuttal comments.

Thereafter, the USTR will analyze comments, and publish a final determination on the tariff action to the Federal Register.

 Agencies will also be working with the Treasury Department to propose measures that address China’s investment practices that involve the acquisition of sensitive technologies, and the USTR will be launching a WTO complaint.

Background Information on Section 301

Actionable conduct under section 301(b)(1) includes, inter alia, acts, policies and practices of a foreign country that are unreasonable or discriminatory and burden or restrict U.S. commerce. Unreasonable actions are those that while not necessarily in violation of, or inconsistent with, the international legal rights of the United States are otherwise unfair and inequitable.

These provisions exist as safeguards for any WTO member who feels its economy is being damaged by such actionable conduct of another country.  In order to establish that the acts, policies, and practices of the Government of China (as they relate to technology transfer, intellectual property, and innovation) were indeed actionable under the Trade Act, the President called for a section 301 investigation in August of 2017.  After investigation, the USTR's Section 301 Report issued in October 2017, reached the already widely-appreciated conclusion that China’s acts, policies, and practices do involve the unfair and harmful acquisition of U.S. technology.   China's practices have been an important element of a strategy to become a leader in a number of industries, as reflected in China’s ‘‘Made in China 2025’’ policy.

Following the report, President Trump issued a Presidential Memorandum on March 22, 2018, describing the range of actions that the United States would pursue in response, and directing the USTR to compile the list of tariff items against which 25% ad valorem duties would be assessed.

 

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CURATED NEWS :

April 23, 2018: Customs: CSMS #18-000301: Allows CBP 300 days to reject entries subject to sec. 232 & sec. 301. 

April 12, 2018:  POTUS proposes rejoining TPP.

April 11, 2018: Senator Grassley (R-Iowa) quote following trip to China: [China] “will do anything legal or illegal, moral or immoral, ethical or unethical ... to get ahead and stay ahead.”  Lawmakers calling for TPP and NAFTA as bulwarks.

April 6, 2018: POTUS: Statement on China Trade War: directing USTR to look at additional tariffs and to plan for the protection of US industry (farmers).

April 5, 2018:  Reuters: China tariffs to go into effect Monday.

April 3, 2018: USTR Notice of Determination and Request for Public Comment re: Section 301 List of Products against which duties may be applied.

March 22, 2018, POTUS: Memorandum announces the section 301 process. 

March 22, 2018: USTR: Report on section 301 investigation and executive summary and fact sheet.

October 10, 2017: USTR: Section 301 Investigation Hearing and witness list.

August 24, 2017: USTR announces a section 301 investigation on China's practices on Technology Transfer, Intellectual Property, and Innovation.

August 14, 2017: POTUS:  Memorandum calling for section 301 investigation.