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USTR Releases a Third Proposed List of Tariffs on $200 Billion in Chinese Imports

Last night, the Office of the U.S. Trade Representative (“USTR”) released a new proposed list of $200 billion worth of products from China that could face an additional 10 percent ad valorem tariff. The list covers 6,031 product categories, including a multitude of consumer goods such as luggage, tires, furniture, apparel, mattresses, household goods, components in telephones and flat panel displays and more. The list will be subject to a public comment and hearing process, which is scheduled to conclude in late August: requests to appear at the hearing and a summary of expected hearing testimony, along with optional pre-hearing written comments, must be submitted by July 27, 2018; written comments are due August 17, 2018; a public hearing will be held on August 20-23, 2018; and post-hearing rebuttal comments must be submitted by August 30, 2018.

The newly proposed tariff list follows two earlier tariff lists that the Trump Administration has released as a result of an investigation conducted by the USTR under Section 301 of the Trade Act of 1974. That investigation found at least $50 billion in harm to the U.S. economy each year due to Chinese intellectual property and technology transfer policies and practices. The first list of tariffs on $34 billion worth of Chinese products went into effect last Friday; the second list covering $16 billion worth of Chinese goods is currently subject to a public comment and hearing process. USTR stated that the $50 billion in products targeted by these two lists “are those that benefit from China’s industrial policy and forced technology transfer practices.” The release of the third list was foreshadowed by President Trump’s directive to USTR last month to identify $200 billion worth of Chinese goods for further tariffs if China followed through with its threat of retaliation. Beijing has in fact retaliated by implementing tariffs last Friday targeting $34 billion in U.S. imports into China. President Trump has threatened to add a fourth round of tariffs on goods worth $200 billion if China retaliates yet again. In response to this third round of proposed tariffs, Beijing vowed to respond with counter-measures and a WTO lawsuit. The specifics of China’s response remain to be seen.

American companies with interests in China should evaluate the impact of the tariffs on their businesses, identify risks arising from U.S. actions and formal or informal Chinese retaliation, and consider potential opportunities to address longstanding concerns as the two governments seek resolution of their trade disputes.

© 2018 Covington & Burling LLP

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Christopher Adams Regulatory and public policy attorney, Covington
Senior Advisor

Christopher Adams advises clients on matters involving China and the region. A non-lawyer, Mr. Adams recently served as the Senior Coordinator for China Affairs at the Treasury Department. He coordinated China policy issues across the U.S. government, led negotiations with China on a broad range of trade and investment issues, managed the highest level U.S.-China economic policy dialogues for the Obama and Trump administrations, and advised the Treasury Secretary and other cabinet officials.

Mr. Adams helped develop and implement U.S. trade policy toward China...

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Alan Larson, Regulatory and public policy lawyer, Covington
Senior Advisor

Alan Larson provides clients with strategic advice, counseling and representation at the intersection of international business and public policy. A Ph.D. economist, decorated diplomat and non-lawyer, Mr. Larson advises clients on high stakes international challenges. His trouble shooting takes him to all parts of the world. His practice encompasses international investment and acquisitions; sanctions and trade compliance; international energy transactions, international aviation and international trade. He has helped win approval of the U.S. Committee on Foreign Investment in the U.S. (CFIUS) for some of the highest profile foreign investments in the United States, including several by state-owned companies and sovereign wealth funds.

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Marney Cheek, International trade attorney, Covington
Partner

Marney Cheek is co-chair of the firm’s Arbitration Practice Group. She represents both states and corporate clients in complex international disputes, drawing upon her expertise in public international law, investment, and trade matters. She handles international disputes before numerous tribunals, advises on complex commercial and investment treaty cases, and litigates international law issues in U.S. Courts. Her practice spans a range of jurisdictions and industries. She is recognized by Chambers and Legal 500 as a leading arbitration practitioner....

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John Veroneau, Regulatory and public policy lawyer, Covington
Partner

John Veroneau is a Chambers’ ranked international trade lawyer and is a partner in the International Trade Practice Group. Having served in senior positions in both Executive and Legislative branches, he provides legal and strategic advice to clients on a broad range of international trade and other public policy matters.

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Gina Vetere, Regulatory and public policy lawyer, Covington
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Gina Vetere provides legal and strategic advice to clients on international trade and global policy matters. Ms. Vetere counsels clients on the negotiation, implementation and enforcement of bilateral and multilateral trade agreements, including in the areas of intellectual property, market access, regulatory trade barriers, online commerce, competition, and investment.

Ms. Vetere joined Covington after serving as executive director for international IP at the U.S. Chamber of Commerce’s Global Intellectual Property Center (GIPC), where she led industry efforts to...

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