Reactions to Section 301 Tariffs Divide Industry, Lawmakers Along Mostly Predictable Lines
The reactions from industry and Capitol Hill on the Section 301 tariffs were largely split along lines previously drawn over the Trump administration's general approach to tariffs. House Ways and Means Committee Chairman Kevin Brady, R-Texas, said in a news release that while the changes from the initial list of products from China were "encouraging, " he is "alarmed that additional products are now placed on the list for possible future action." Brady called on the Office of the U.S. Trade Representative to "narrow these tariffs and implement an effective exclusion process that provides relief for American companies, unlike the problematic Commerce 232 exclusion process.”
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Ways and Means ranking member Richard Neal, D-Mass., called the tariffs an "important tool" and a "significant step forward." Still, "I am seriously concerned by the apparent lack of coherence in the Administration’s approach thus far with China. Even the best tools, without a plan for how to use them, are useless,” Neal said in a statement. Sen. Sherrod Brown, D-Ohio, was pleased with the announcement and said "today’s tariffs are an important step toward enforcing trade laws and making clear the U.S. will not allow China to cheat Americans out of their jobs.”
Senate Finance Committee Chairman Orrin Hatch, R-Utah, said Trump's "commitment to confronting the threat China poses" is "laudable." Tariffs will cause harm on both sides, so "China must take responsibility and act expeditiously to change its policies to avoid the damaging effects of tariffs and escalating retaliation," he said. Senate Finance ranking member Ron Wyden, D-Ore., also celebrated the idea of policy changes in China, "but like other Trump trade actions, I'm concerned it was more impulsive than strategic," he said in a statement. "Since the president took office, China has only imposed more trade barriers. NAFTA talks are on life support. Our closest allies are questioning the relationship, and American exporters are facing retaliation all over the world.” Sen. Mark Warner, D-Va., said in an emailed statement that he shares Trump's concerns about China, but "this President’s erratic approach to resolving this issue gives me pause."
Tech and retail groups roundly criticized the tariffs for their potential to hurt American consumers through pass-along costs, including the Consumer Technology Association, which was among those that successfully fought to remove TVs from the final list. “Tariffs go against the interest of the American people,” said Michael Petricone, CTA senior vice president-government and regulatory affairs.
The agency did keep tariffs on flat panels for applications other than TVs imported from China under subheading 9013.80.70. Bob O’Brien, president of Display Supply Chain Consultants, speculated in an email that those might include “other types of displays that are not LCD, including vacuum fluorescent displays, LEDs, passive-matrix OLEDs, and the like.” Those types of displays “are used in a variety of applications, including automotive and appliances,” he said.
USTR will also set new tariffs on Chinese-sourced “machines and apparatus for the manufacture of flat panel displays” imported to the U.S. under subheading 8486.30.00. O’Brien said producers of such machinery are heavily “concentrated” in Japan and South Korea. The Chinese government has been pushing more local companies to become involved in that sector, O’Brien said, so tariffs against Chinese imports of that machinery might serve as the Trump administration’s “preemptive” measure against those initiatives.
U.S. Chamber of Commerce CEO Thomas Donohue said in a news release that "this is not the right approach” and “imposing tariffs places the cost of China’s unfair trade practices squarely on the shoulders of American consumers, manufacturers, farmers, and ranchers." The Business Roundtable said it opposes the tariffs, as does the Farmers for Free Trade, in a statement. Coalition for a Prosperous America CEO Michael Stumo called the tariffs a "long overdue step" in a news release. "Anyone supporting open trade and the free market should appreciate the president’s carefully considered enforcement of existing US trade law.”
The Advanced Medical Technology Association said that while some medical devices were removed from the tariffs list, the impact will still be large on that industry. "We estimate that the imposition of an additional 25 percent duties will impact approximately $836 million worth of medical devices and diagnostics-related products entering the U.S. from China," said Ralph Ives, AdvaMed executive vice president, global strategy and analysis, in an emailed statement. The original list included about $2.8 billion worth of medical technology, he said. Also notable is that the other set of "tariff lines issued by USTR does not include medtech products," he said. "We will continue to work with the administration to convey our views on important trade-related matters," Ives said.
The Society of Chemical Manufacturers and Affiliates said the list revisions initially seem like a win for the industry. "While we are still evaluating the tariffs and how they may impact the specialty and fine chemical industry, SOCMA is viewing this as a positive development," said an emailed statement from Robert Helminiak, vice president, Legal & Government Relations, of SOCMA. The American Apparel and Footwear Association said it is pleased that apparel manufacturing machinery was removed from the list but that it remains concerned about retaliations.
The American Chemistry Council said in an emailed release that its members will be especially hurt if the new list of tariffs takes effect. "We are disappointed that the Administration has not listened to our requests to keep America’s thriving chemical manufacturing industry and our products out of the crosshairs of a trade war," the ACC said. "With the release today of a second list of 284 proposed tariff lines, which includes a large amount of plastics, lubricating oils, and other chemicals valued at $2.2 billion, the Administration has now pit U.S. chemical manufacturing directly against China at the front lines of this conflict."
Tariffs are “taxes on American consumers, plain and simple,” said National Retail Federation CEO Matthew Shay. The Telecommunications Industry Association is “extremely disappointed” that the Trump administration “opted to employ this trade remedy,” said Senior Vice President-Government Affairs Cinnamon Rogers. CompTIA has “no doubt that tariffs will create irreparable harm to America’s tech companies, the 11.5 million Americans that work in tech occupations, and consumers who rely on affordable technology in their daily lives,” said Elizabeth Hyman, executive vice president-public advocacy. “Tariffs will result in higher costs for American manufacturers and suppliers and decrease the overall global competitiveness of U.S.-based tech firms.”