Tech group urges US to avoid using tariffs on China

A trade group representing technology companies including Apple, Amazon and Google has urged the US to build an international coalition to take on China’s trade practices and IP rules instead of focusing on tariffs.

In late March, the US announced tariffs of up to $60 billion on China in response to China’s alleged IP violations.

Dean Garfield, CEO and president of trade group Information Technology Industry Council (ITI), called on US President Donald Trump to build and lead an international coalition to apply pressure on China to “change its harmful trade practices”.

The ITI, which also counts IBM, eBay and Facebook as its members, supported the US’s section 301 investigation into China’s alleged IP abuses, which had been ordered by Trump in August last year, calling it “comprehensive and thoughtful”.

However, the trade group added that it cannot “support the heavy focus on tariffs as a solution” because tariffs do not work.

“Tariffs have failed as a tool for opening markets. Instead, they increase costs for American consumers, harm the American economy, inhibit job growth, and are inevitably reversed because of the negative economic impacts and political fallout,” said the ITI’s letter to Treasury Secretary Steven Mnuchin.

Garfield claimed that numerous countries share the US’s concerns about China and its unfair trade practices.

Also,Japan is seeking to join the US’s World Trade Organization (WTO) complaint against China over the alleged theft of IP.

The ITI called on the US to form a coalition of allies and travel to China to negotiate a “balanced, fair and reciprocal trade relationship”, which includes implementation timelines and accountability mechanisms.

“It is time for the international community, led by the US, to stand up and tell China that failure to adhere to international norms and obligations will no longer be tolerated. The time to initiate negotiations is now,” he concluded.

When the tariffs were announced, US Trade Representative Robert Lighthizer said that the section 301 report had concluded that China has a policy of forced technology transfer, of “requiring licensing at less than economic value” and of cyber theft.

The ITI was among 45 associations that warned Trump against the tariffs in the days before his announcement.

On Sunday, April 8, Trump expressed optimism that China would take down its trade barriers “because it is the right thing to do” and that a deal would be made on IP.