IBPA Works with AAP and Others on Section 301 Investigation & Proposed Tariff on Printed Books
Wednesday, June 5, 2019
This article was originally published on June 5th, 2019. It was updated July 24th, August 1st, August 14th, and September 6th 2019. Read the full report below.
Independent Book Publishers Association (IBPA) members are advised that IBPA has joined with the Association of American Publishers (AAP) and others to address the Section 301 Investigation into China’s Acts, Policies and Practices Related to Technology Transfer, Intellectual Property, and Innovation. (See AAP's overview document here.)
As part of its participation, IBPA will submit written comments to the Administration describing how the proposed tariff on printed books, dictionaries, maps, etc. would adversely affect many of our members' businesses.
IBPA members interested in personally participating in the investigation should review the background below, making note of the following two deadlines:
- June 10, 2019: Deadline to submit a request to testify at the Section 301 hearing to be held July 17, 2019 at the U.S. International Trade Commission's building in Washington DC. The request to appear must include a summary of testimony, and may be accompanied by a prehearing submission. Remarks at the hearing may be no longer than five minutes to allow for possible questions from the Section 301 Committee.
- June 17, 2019: Deadline to submit written comments detailing how the tariff would adversely affect your business. See here and below for information on what the comments should specifically address. In addition, a book-industry-specific "comment template" has been prepared as an example to follow. Interested IBPA members can email email@example.com to request the template no later than Friday, June 14, 2019.
IBPA members are invited to send questions and general feedback related to this initiative to IBPA CEO Angela Bole at firstname.lastname@example.org.
On Monday, May 13, 2019, the Administration announced a Public Notice & Comment process addressed to the Presidential directive to impose 25% duties on all remaining products coming from China (some $300 billion in Chinese goods). (This further escalation follows a reported setback in the trade negotiations between the U.S. and China, with USTR stating that China “retreated from specific commitments made in previous rounds.”) These proceedings stem from the Section 301 investigation initiated by USTR in April 2017. In 2018, USTR determined that “the acts, policies, and practices of China under investigation are unreasonable or discriminatory and burden or restrict U.S. commerce.” (See Section 301 Investigation)
The Notice includes an Annex listing 3805 potential products (Harmonized Tariff Schedule-HTS headings) for inclusion in this further round of increased tariffs to be imposed on Chinese goods. The proposed product list excludes pharmaceuticals, certain pharmaceutical inputs, select medical goods, rare earth minerals, and critical minerals. Of note, printed books, including textbooks and children’s books are listed among the categories potentially to be taxed at the additional duty of 25%. Publishing-related HTS subheadings that could potentially be subject to the higher tariff rate are listed below. (See pp. 55-56 of the Notice Annex.)
Per the Notice, written comments are due on June 17th, with a hearing to be held on the same date. Stakeholders interested in participating in the hearing must file a request to appear and a summary of the expected testimony on June 10th. Post-rebuttal comments must be submitted within 7 days of the public hearing. The comments should address:
- The specific tariff subheadings (HTS) to be subject to increased duties, including whether the subheadings listed in the Annex should be retained or removed, or whether subheadings not currently on the list should be added. Comments should address specifically:
- Whether imposing increased duties on a particular product would be practicable or effective to obtain the elimination of China’s acts, policies, and practices; and
- Whether imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers.
- The level of the increase, if any, in the rate of duty;
- The appropriate aggregate level of trade to be covered by the additional duties.
HTS List of Potentially Covered (Book) Products:
- 4901.10.00 Printed books, brochures, leaflets and similar printed matter in single sheets, whether or not folded
- 4901.91.00 Printed dictionaries and encyclopedias and serial installments thereof
- 4901.99.00 Printed books, brochures, leaflets and similar printed matter, other than in single sheets
- 4903.00.00 Children's picture, drawing or coloring books
- 4905.91.00 Maps and hydrographic or similar charts of all kinds, including atlases and topographical plans, printed in book form
- 4910.00.60 Printed calendars, including calendar blocks, printed on paper or paperboard by other than a lithographic process
- 4911.10.00 Printed trade advertising material, commercial catalogs and the like
UPDATE: June 19, 2019
IBPA Comments on Section 301 Investigation & Proposed Tariff on Printed Books (via IBPA website)
UPDATE: July 3, 2019
Tariffs on Books from China Suspended (via Publishers Weekly)
UPDATE: July 24, 2019
As previously reported, Trump and Xi agreed to resume trade negotiations, meaning that the threat of 25% tariffs on the (remaining) $300 billion goods (under List 4) coming from China is currently on hold. This “pause” in the trade war escalation unfortunately does not mean that we are “off the hook.” Should the Administration again find China to be “walking back” from its commitments, Trump will likely call for the tariffs proposed under List 4 to be imposed. (Recall that List 4 was proposed, and List 3 implemented, in response to China’s Communist Party leadership not agreeing to the terms of the agreement brought home by its Foreign Ministry in May.)
Now that the Section 301 comment, hearings, and rebuttal comment process for List 4 has ended, the Administration is technically at a decision point. That is, should the negotiations between Trump and Xi again stall, Trump can pull the trigger and implement tariffs on List 4 products not removed from the final list. While there does not appear to be a defined negotiating period for the resumed trade negotiations, this pause allows us to continue advocacy with Congress and the Administration in an effort to solidify removal of printed books from List 4.
UPDATE: August 1, 2019
IBPA members may have already seen the breaking news headline from the NY Times, re. the President’s tweets expressing disappointment that China is not expeditiously buying the ag products it promised. As such, he notes that “a small additional Tariff of 10%” on the remaining goods imported from China will take effect on September 1, 2019. See https://www.nytimes.com/2019/08/01/us/politics/trump-tariffs-china.html (Recall that the proposed tariff for the remaining $300 billion worth of goods – List 4 products, which includes books – was to be up to 25%.)
The tweets may have pre-empted USTR. Thus, if indeed a tariff of 10% will be imposed, USTR must issue a notice identifying the products to be included in the final list (List 4) to be subject to the tariff. Printed books under Chapter 49 could be removed from the final list (the submissions and testimony from the book industry, as well as lobbying efforts, perhaps having some effect). Unfortunately, at this point, there is no way of knowing whether books are on or off the list.
While the tweets of course give no indication as to timing (i.e., when the final list will be released), the list will likely be released mid-August given the September 1st threat.
UPDATE: August 14, 2019
USTR announced the next steps in the process of imposing additional 10% tariff on some $300 billion of Chinese imports, as well as the outcome. Proposed List 4 was divided into two lists, List 4A with effective date of September 1, 2019 (as announced) and List 4B with effective date of December 15, 2019. Click here.
In short, only Bibles and other religious books were excluded/removed from the list, though tariffs on children’s books and certain types of calendars were at least delayed to December 15, 2019.
List 4A (which becomes effective September 1, 2019, includes all printed books, except Bibles). Click here.
List 4B (which is delayed to December 15, 2019, includes children’s books, printed calendars, and post cards). Click here.
An exclusion process is to be announced, and IBPA will continue to work with the Association of American Publishers (AAP) to review that process when it happens.
UPDATE: September 6, 2019
The tariffs are in place and are being collected on all Chinese-made goods entering the U.S. after 12:01 AM, September 1, 2019. The rate went up to 15%. The current administration, having no more products from China to tariff, raised the announced rate of 10% to 15% on August 23, 2019 (when China announced more of its own tariffs on U.S. goods). The same 15% rate will hold for goods coming in on December 15, 2019. There is as yet no exclusion process announced.