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20 March 2018Patents

US businesses urge Trump to rethink China IP tariffs

American businesses in the technology and retail sectors have joined forces to warn US President Donald Trump against tariffs aimed at punishing China for its IP practices.

On behalf of the technology sector, the Information Technology Industry Council (ITI) and 44 other associations released a letter addressed to Trump on Sunday, March 18.

Other signatories include the Computer and Communications Industry Association, which lists companies such as Amazon, Facebook, eBay, Google, and Samsung as its members, and the Internet Association which lists Microsoft, PayPal, Spotify, and Twitter as its members.

This was followed by a letter from the Footwear Distributors and Retailers of America (FDRA) on Monday, March 19. The association represents the interests of footwear brands in the US including Crocs, Clarks, Nike, Under Armour, and Harley-Davidson.

Senior officials yesterday confirmed that Trump is planning to impose $60 billion in annual tariffs against Chinese products, according to The Washington Post. It follows Trump’s pledge to punish China for unfair trade practices including IP theft, which he had previously ordered an investigation into.

The ITI’s letter recognised the need to “address China’s discriminatory practises” relating to market access, technology transfer and IP, but noted that the US should not punish China by taking action which would “penalise the American consumer and jeopardise recent gains in American competitiveness”.

Imposing sweeping tariffs would “trigger a chain reaction of negative consequences” and would raise costs for businesses and consumers, as well as provoking Chinese retaliation, the ITI added. It urged the administration to work with businesses to establish an effective, but measured, solution.

Other signatories of the ITI letter include the US Chamber of Commerce and the US Council for International Business, as well as numerous trade associations relating to consumer goods, technology, and shipping.

The FDRA’s letter similarly expressed “strong concerns” about the proposed tariffs. It said that “footwear imports already face astronomically high tariff rates” which disproportionately impact working class individuals through “hidden taxes”.

High tariff rates will stifle innovation as well as job creation, according to the FDRA. Given the “price sensitivity” of footwear products, increased costs will ultimately result in higher prices for consumers and “fewer US jobs”, the letter added.

In addition to the two letters, more than 100 Republican members of Congress signed a letter urging Trump to limit the proposed tariffs on steel and aluminium, to avoid “unintended negative consequences to the US economy and its workers”, earlier this month.

During a recent Senate hearing, the chairman of the Senate Intelligence Committee expressed concerns about the threat of Chinese businesses spying on companies in the US to gain access to proprietary information. The US commerce secretary has also accused China of having “ disrespect” for IP, which poses a “direct threat” to US trade.

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14 February 2018   China is trying to gain access to US proprietary information through telecoms companies, academia and joint business ventures, a US senator has claimed.
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22 March 2018   US President Donald Trump is expected to announce trade sanctions on China later today, in an effort to crack down on China’s IP violations.
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