Second Wave of Section 301 Tariffs Target $16 Billion Starting August 23rd

Yesterday, the Office of the United States Trade Representative (USTR) released a finalized second list of tariffs, approximately $16 billion worth of imports from China, that will be subject to an additional 25 percent duty starting August 23, 2018. Originally published on June 15^th, the tariffs are part of the U.S. response against unfair trade practices after Section 301 investigation found evidence of forced technology transfer and intellectual property infringement against American companies.  The final list covers 279 lines, reduced from the original 284 after a two-day public hearing with comments from industry.

The USTR announcement specifically listed the following unfair trade practices uncovered by Section 301 investigation:

• China uses joint venture requirements, foreign investment restrictions, and administrative review and licensing processes to require or pressure technology transfer from U.S. companies.
• China deprives U.S. companies of the ability to set market-based terms in licensing and other technology-related negotiations.
• China directs and unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets to generate large-scale technology transfer.
• China conducts and supports cyber intrusions into U.S. commercial computer networks to gain unauthorized access to commercially valuable business information.

Beijing respondedwith a matching set of retaliatory tariffs, placing a 25 percent penalty on scrap metal, coal, crude oil, automobiles, and motorcycles from the United States, also to be implemented on August 23^rd.  But tit-for-tat protectionism hasn’t wavered between the two trading giants; the White House recently released a third list under consideration worth $200 billion, with threats of a final fourth as a real possibility.

Click here to view the final tariff list.

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