$200 Billion Tariffs Vulnerable to Legal Challenge, Says Consumer Technology Industry

The Consumer Technology Association (CTA) today submitted comments to U.S. Trade Representative (USTR) Robert Lighthizer on the administration's proposed tariffs on $200 billion of Chinese imports. CTA's comments detail 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 argues the following:

• Section 301 authorizes actions following fact-based investigations, not the responses to China's retaliatory actions; 
• 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."

 A study commissioned by CTA has also 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. labor 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.

 Read CTA's comments here.