U.S. TARIFF TARGETS LISTED FOR CHINA PIRACY SANCTIONS

Byline: Carol Emert

WASHINGTON--Fulfilling a standing threat, U.S. Trade Representative Mickey Kantor on Saturday announced the imposition of stiff tariffs on $1.08 billion of Chinese imports, including $7 million in silk gloves, scarves and other accessories.
The 100 percent tariff on the targeted products, which effectively bans them by doubling their wholesale value, will be imposed "one minute after midnight on Feb. 26," unless the Chinese can convince U.S. trade officials that they are ready to halt rampant intellectual property rights violations by Chinese manufacturers, Kantor said at a morning press conference at the White House Conference Center. Apparel is not included on the list.
Kantor denied that the move--the largest trade retaliation ever undertaken by the U.S.--would drive up consumer prices. The sanctioned products were selected in part because substitutes are readily available from U.S. or third-country suppliers, he said.
While silk products are manufactured almost solely in China, with virtually no production in the U. S., Kantor said there are many available substitutes for silk goods, such as cotton products "made by U.S. workers in U.S. factories."
Robert Hall, vice president and counsel for government affairs at the National Retail Federation, disputed Kantor's assertion.
"People buy a silk scarf because it's silk, and I don't think people are going to replace silk scarves with cotton scarves," he said in a telephone interview.
Hall also asserted that consumer prices for many price-sensitive goods on the list will rise because China "has been the number-one source for high quality, low cost goods" in many of the named categories.
The Feb. 26 deadline will also force importers to air freight shipments they would otherwise have shipped by less expensive sea routes, which could add to the retail price, Hall said.
"I certainly understand and am sympathetic to the effort to fight piracy, but let's find another way to hit the Chinese other than to hit the U.S. consumer, particularly the lower-to-moderate-income consumer," Hall said.
Kantor said silk was chosen for retaliation because its growth as an export is "enormous" and because Chinese government entities are closely linked to the silk industry there.
Silk products to receive the tariffs include gloves, mittens, handkerchiefs, shawls and scarves that contain at least 70 percent silk by weight. Other goods include some athletic footwear and other leather footwear for women, gold jewelry, some battery-powered wrist watches and jacquard cards and heads for power-driven weaving machines.
A category of "miscellaneous plastic articles," such as picture frames, accounts for almost half of the sanctioned products. By dollar value, the next-largest categories include answering machines and cellular telephones; surf boards, fishing rods and other sporting goods; wooden picture frames and jewelry boxes, and some bicycles.
At the press conference, Kantor illustrated Chinese IPR violations with a display of U.S.-made products, including compact discs, video games, computer software, cans of Del Monte creamed corn and boxes of Kellogg's breakfast cereal, along with nearly identical pirated copies sold in China.
One CD ROM disc holding 70 software programs worth about $10,000 was found in Beijing selling for less than $100, Kantor said.

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