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CEA To Senate: Veto China Bill

9/25/2006 12:34:00 PM Eastern

Arlington, Va. — The Consumer Electronics Association (CEA) released a statement Friday encouraging the Senate to vote against a pending bill that would impose a 27.5 percent tariff on imports from China.

The bill, S.295, was proposed by Senators Chuck Schumer (D-N.Y.) and Lindsay Graham (R-S.C.) as an attempt to address China’s controversial currency policy.

CEA’s argument against the bill stems from a sentiment that the cost of such a tariff would ultimately fall to American consumers and businesses that purchase and deal with Chinese imports.

Elizabeth Hymen, CEA’s VP International suggested that “sector reform, rather than external tariffs” would be a more effective method of dealing with the issue. She said the legislation “will not send a ‘signal’ to Chinese officials that we are frustrated with its policies. To the contrary, it will undermine a constructive dialogue between the United States and China that has already yielded some progress. Many economists and observers expect a gradual appreciation of the Yuan over the balance of this year. In the meantime, we should reject proposals that violate the World Trade Organization’s Uruguay Round Agreement and seriously undermine U.S. credibility in the international trading system.”

CEA supported its argument by listing some particularly CE-oriented points as to why legislators might want to consider passing on the bill. These points included China’s role as “an important destination market for CE parts and components,” and the fact that the U.S. Commercial Service estimates that China accounts for 26 percent of global demand for electronic components. CEA also argued that China is integral to the industry’s strategy to be competitive for a number of reasons and that legislators should be interested in the competitiveness of the U.S. CE industry because “a competitive and R&D-intensive CE industry supports high wage and high skilled jobs in the U.S.”

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