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Epson requests exemptions in US/China trade tariff war

Epson has joined hundreds of US, Chinese and Japanese companies in requesting product exemptions from President Donald Trump’s plan to increase tariffs on another $300 billion of products from China - including printers and copiers - in the escalating US/China trade war. Epson has several manufacturing sites in China and, in its submission to the USTR, infers that is reviewing its manufacturing bases but that, since it owns most of its sites, relocation is not always feasible in the near-term.

Tradewar US China
 

US subsidiaries of Japanese companies including Epson America, Sony and Mitsubishi, as well as American (HP, Walmart, Hallmark, 3V Signs, Asia Pacific Offset) and Chinese businesses and US industry groups are requesting exemptions to Trump’s proposal during a seven-day hearing on the additional tariffs that began this week.

kendra jones
       Kendra Jones, Epson America

In its submission, Epson told the Office of the United States Trade Representative (USTR) that it was already reviewing its production of products affected by the USTR's Section 301 report on tariffs.

“Epson requests that USTR remove from the potential list of products subject to additional duties projectors, large format printers, receipt printers, and scanners, as additional duties on these products would have a detrimental impact on U.S. consumers and businesses," said Kendra Jones. Epson America’s Vice President Legal Affairs and General Counsel.

“Epson supplies these products to businesses, households, and educational and religious facilities. In particular. small and medium sized companies rely on the high quality, speed, and cost-efficiency of Epson's products to grow their revenue and to reach a wider audience. School districts rely on Epson's multi-media equipment such as projectors as an effective and cost-efficient way to keep students engaged in the classroom. These are the entities that are most vulnerable to the changes in supply structure and prices that will likely occur if additional duties are implemented.

“In many cases, there is simply no viable alternative to Chinese imports of these products. Even in instances where alternative sources can be found, Epson's vertically integrated structure. through which it owns its overseas manufacturing facilities instead of outsourcing, makes it difficult to shift production to another country. Despite these difficulties, Epson has been making efforts to move some of its production outside of China,” according to the submission signed by Epson America Inc.'s Kendra Jones and COO Andrea Zoeckler.

Locally, an Epson spokesperson says: "Like many other companies, Epson has been exploring means of minimising the impact of Section 301 tariffs. However, Epson is predominantly vertically integrated, owning its production facilities abroad rather than contracting with third-party manufacturers. Therefore, it requires more investment and coordination for Epson to relocate production facilities and employees than its competitors that contract with interchangeable third-party manufacturers.”

More than 320 companies will testify before this week’s hearing and also on June 24 and 25 at the U.S. International Trade Commission.

The Trump administration last month raised tariffs to 25% on $200 billion of Chinese imports and ordered the USTR to prepare tariffs on another $300 billion of goods which would include about 3,800 items - covering almost all Chinese exports to the US - in response to "unfair trade practices" and alleged intellectual property theft by Chinese companies.

The additional tariffs would have a “significant, negative and long-term impact on American businesses, farmers, families and the U.S. economy,” said the American Apparel & Footwear Association, representing hundreds of retailers and manufacturers. “Tariffs are taxes paid directly by U.S. companies...not China.”

The US Chamber of Commerce told the hearing that proposed tariffs on a further $300bn of Chinese imports would “dramatically expand the harm already done” to US consumers, workers and companies.

Japanese manufacturer Ricoh last month announced it would shift some production of its multifunctional printers from China to Thailand to avoid new US tariffs.