March 5, 2021 9:03 am

$200 billion tariffs on Chinese imports may not stand legal scrutiny: CTA CEO Gary Shapiro

“We are skeptical the $200 billion tariffs will be upheld in court if challenged,” said Gary Shapiro, CEO and president CTA.

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The Consumer Technology Association (CTA) which owns famous technology conference CES said that Trump administration seems to be misguided on its proposed tariffs on $200 billion of Chinese imports. The technology industry body submitted comments to U.S. Trade Representative (USTR) Robert Lighthizer. In its submission, the CTA has detailed out how these tariffs may be vulnerable to a legal challenge because they are not based on the required legal finding of unfair business practices by China, and instead are retaliatory in nature and require a separate Section 301 investigation, which USTR did not conduct.

CTA said Section 301 authorizes actions following fact-based investigations, not the responses to China’s retaliatory actions. It asserted that Section 307’s modification authority does not extend so far as to allow USTR to quadruple the amount of goods subject to tariffs without a new investigation, and the action is out-of-time under the statutory deadlines imposed by Sections 304 and 305 of the Trade Act.

“We are skeptical the $200 billion tariffs will be upheld in court if challenged,” said Gary Shapiro, CEO and president CTA. “The extraordinary, six-day hearing before the USTR where several hundred testified against tariffs is a testament that the administration is misguided on this issue. If tariffs are placed, the administration will be on the hook for our GDP shrinking, hundreds of thousands of Americans losing jobs and American families shouldering higher costs due to the rising cost of consumer products. We urge the administration to think twice before slapping on this round of tariffs,” he added.

Citing a study that it commissioned, CTA has cautioned that 25 percent tariffs on printed circuit board assemblies and connected devices will cause price increases of up to six percent, impacting even products made entirely with U.S. labour and components. Those price increases are expected to reduce consumer purchasing by 12 percent. More, the impact of a 25 percent tariff on connected devices alone is expected to cost American shoppers an extra $3.2 billion annually.

CTA is the trade association representing the $377 billion U.S. consumer technology industry. More than 2,200 companies – 80 percent are small businesses and startups – are CTA member. CTA also owns and produces CES, the world’s biggest consumer technologies event.

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