PPB December 2018

A s we look back at the previous year in trade policy, it may very well be remembered as the year the trade war shifted from rhetoric to reality. In fact, in many ways, 2018 represents the culmination of President Trump’s trade promises: threatened tariffs were imposed and at least one existing agreement that was at risk was re-negotiated. Yet, despite these activities, we know the uncertainty that reigned in 2018 is very likely to continue in 2019 withmore tariff hikes promised and new agreement negotiations just getting started. In this environment, the promotional products industry faces real risks, and the greatest risk of all are tariffs on imports fromChina. The American business community has long complained about how the Chinese government treats U.S. businesses seeking to do business in China. These complaints range from conditioning access to the Chinese market on participating in joint ventures with Chinese companies that can often be state-owned enterprises to outright theft of American companies’ intellectual property. Although recent Democratic and Republican administrations engaged in high-level diplomatic talks with their Chinese counterparts, little progress was made in changing how the Chinese sought to achieve prosperity. In August of 2017, just six months after coming into office, the Trump Administration picked up a rarely used tool to bring China to the table: Section 301 of the Trade Act of 1974. Used only once in the past 18 years, President Trump launched an investigation into unfair Chinese trading practices and concluded eight months later in an exhaustive report Bags, hats and notebooks are among the promotional products subject to the latest tariffs on Chinese imports. by Joshua Teitelbaum A Closer Look At Section 301 Tariffs 82 | DECEMBER 2018 | THINK