Today, the Consumer Technology Association (CTA) filed its Section 301 submission to the Office of the United States Trade Representative on the Trump administration's proposed tariffs on $50 billion of Chinese imports. The comments
submitted show the negative consequences tariffs have on the economy and also illustrate the disproportionate harm tariffs have on American startups, including CTA member companies HiberSense and Local Motors:
"Some of our members, particularly innovative startups, say the proposed tariffs put them at a disadvantage relative to their competitors in other nations. They fear that those competitors will be able to undercut them in the market by continuing to import critical components from China, now at a fraction of the cost to U.S. businesses. This is a particular concern for CTA member Local Motors, whose comments are addressed in detail below and noted in CTA's public hearing testimony. Other startups fear that the tariffs - and the resulting business and economic uncertainty - will prevent their products from going to market entirely. CTA member company HiberSense, whose comments are also addressed in detail below and noted in CTA's public hearing testimony, believes imposing these tariffs will delay or halt its plans to bring manufacturing of its imported products from China to the U.S."
CTA conducted an internal survey of its members and found 193 tariff classifications under the proposed tariffs that affect 79 percent of our small business members. Of those small businesses, four out of five say they either cannot switch their sourcing from China to another country or cannot do so without a costly disruption to their business. Of those CTA members that can potentially switch sourcing, the majority find it economically or otherwise impractical to consider shifts to the U.S.
"Rather than imposing self-harming tariffs, CTA prefers the administration to engage diplomatically with China alongside other nations also injured by China's unfair trade practices. Diplomatic engagement can address the concerns of governments and industries in a trade-neutral fashion. Key priorities for these efforts should include: clarification and increased transparency in Chinese IP laws; continued implementation of China's specialized and unified IP court system; encouragement of innovation with progressive rather than protectionist laws; increased legal and regulatory due process; increased fines for IP violations; and increased enforcement activities, including joint or plurilateral programs."
CTA and the National Retail Federation (NRF) have conducted economic impact studies that show the proposed tariffs will lead to four jobs lost for every job gained - a net loss of 134,000
jobs - and TVs from China will increase the prices Americans pay for TVs, costing U.S. consumers an estimated $711 million
over the next year.
On May 16, CTA's Vice President of International Trade Sage Chandler will testify at USTR's public hearing.