Update: Up to 25% Tariffs on Chinese Art Will Expand China’s Monopoly

U.S. Administration Benefits China by Adding Tariff on Art and Antiques

Hair Ornament, China, Walters Art Gallery.

We are updating this article per the administration’s announcement that the President has directed the U.S. Trade Representative to consider setting tariffs of 25% on the $200 billion list of Chinese imports, including art and antiques. The U.S. Trade Representative’s Office, which is taking public comment here, has extended its comment period as a result.

To be assured of consideration, you must submit comments and responses in accordance with the following schedule:

July 27, 2018: Due date for filing requests to appear and a summary of expected testimony at the public hearing, and for filing pre-hearing submissions.

August 17, 2018: Due date for submission of written comments.

August 20-23, 2018: The Section 301 Committee will convene a public hearing in the main hearing room of the U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436 beginning at 9:30 a.m.

August 30, 2018: Due date for submission of post-hearing rebuttal comments.

USTR strongly prefers electronic submissions made through the Federal eRulemaking Portal: http://www.regulations.gov. The docket number is USTR-2018-0026.

The Issues Are Different for Antiques

Ordinarily, there are no customs duties on art or antiques. It is considered in the public interest to bring art and literature to the U.S., so in the past, no duties were imposed on foreign art or books.

Goddess Sarasvati, Eastern Tibet, Kham region, 18th century, Mineral pigments and gold on cotton cloth, Heeramaneck Collection.

The Trump administration is changing that, at least for art and antiques from China. This is one of the more bizarre stories in the tariff saga, since a tariff on antiques will please the Chinese government and reinforce its global dominance and monopoly on Chinese art.

Artworks, antiques, and historical and archaeological collections are included in the Trump administration’s proposed 25% retaliatory tariff on an additional $200 billion of China imports. The Office of the United States Trade Representative (USTR) is requesting comments on the proposed list. This is an opportunity for readers to express their opinion directly to the U.S. government. The Schedule for submissions and instructions for making comments are appended to this article below.

What makes this tariff different?  U.S. import restrictions already cover virtually all Chinese art and artifacts from the Paleolithic through the Tang period, as well as monumental sculpture and wall art over 250 years of age. The restrictions are claimed by China to be for the protection of ancient archaeological sites, but in fact, they reinforce China’s monopoly on Chinese art. Global Heritage Alliance Executive Director Peter Tompa states, “A tariff will only drive more Chinese artifacts back to China, which is exactly what the State Department is doing with its import restrictions.”

Duties on Art and Antiques to “Retaliate” for IP and Tech Theft

The Office of the United States Trade Representative (USTR) is a federal agency directly under the Executive Office. It recommends U.S. trade policy to the President and conducts trade negotiations with foreign nations.

In March of this year the USTR found that “China has been engaging in industrial policy which has resulted in the transfer and theft of intellectual property and technology.” The Trump administration then imposed a 25% tariff on a combined $50 billion worth of Chinese goods related to IP and tech. China retaliated with its own 25% tariff on $34 billion of US goods with $16 billion more in tariffs threatened. So the trade wars began…

Metropolitan Museum of Art, New York.

However, it is clear that the proposed tariff on Chinese art only punishes U.S. collectors, dealers, and art museums – not the Chinese, who requested import restrictions on art and antiques up to 1912 in the first place!

The U.S. art trade has been subject to import restrictions amounting to a ban on Chinese antiquities since 2009. U.S. art community representatives asked the administration not to renew these restrictions just last May, in testimony submitted to the Cultural Property Advisory Committee to the President.

The dealers’ primary arguments against extending restrictions on Chinese art imports are based on the harm done to the U.S. museum and public interest in access to Chinese art and culture, and the harm to hundreds of American small businesses.

In fact, opponents of trade restrictions argued in May that China’s violation of U.S. intellectual property rights and the counterfeiting of U.S. coins in China were in flagrant violation of U.S. currency regulations. These were both important reasons NOT to impose import restrictions that benefited Chinese businesses and harmed U.S. ones.

Chinese summer court robe, c. 1890s, silk gauze couched in gold thread, East-West Center.

In addition, import restrictions are based upon a U.S. law, the Cultural Property Implementation Act, which sets criteria that each requesting country must meet. These criteria include that the objects being restricted are at current risk of looting, that the requesting country is doing its best to “protect” such objects and sites, that other countries with significant trade have imposed similar restrictions, and that the public interest in the circulation of art is served by the restrictions.

Opponents of import restrictions pointed out that China does not meet the Congressional criteria for import restrictions under the Cultural Property Implementation Act. Since Chinese collectors dominate the world market, China itself has the largest market in the world for Chinese art. China is building dozens of museums each year, and auction houses affiliated with the Chinese government dominate the worldwide auction market in Chinese art.

Regulatory Changes

The supplemental action proposed by the bill affects all the goods in the linked Annex to the Harmonized Tariff Schedule of the United State (HTSUS). These include everything from frog legs to rubber gloves.

Chang Hsüan, Women making textile, Indian ink and color on silk, Boston Museum of Fine Arts, Wikimedia Commons.

At the very end of the list are artworks, including paintings, drawings, pastels, collages, engravings, prints, lithographs, sculpture, and statuary (under categories 9701.10.00, 9701.90.00, 9702.00.00 & 9703.00.00). A specific category (9706.00.00), applies to “antiques of an age exceeding one hundred years,” and another (9705.00.00), to “collections and collectors’ pieces of historical and archaeological interest.”

Working artists should also note that artists’ supplies, including paint, ink, and all manner of photography and cinematic supplies, are also included in the list of goods to which the new tariff will apply.

How to Comment on the Proposed Tariffs

Members of the public are invited to comment (note, this explanatory announcement has the old dates for testimony) and to inform the USTR of their opinions.

The USTR requests that commenters address specifically whether imposing increased duties on a particular product would be:

(1) practicable or effective to obtain the elimination of China’s acts, policies, and practices, and (2) whether maintaining or imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers.

Where to comment:

The USTR prefers electronic submissions made through the Federal eRulemaking Portal.

Insert the docket number USTR-2018-0026 in the Search bar. A new window will open. Click the “Comment Now” button to submit your comment.

There are also instructions on how to submit paper testimony on the request for comments page.

Schedule for Comments:

Chinese jade circle, Walters Art Gallery, Baltimore.

The Office of the United States Trade Representative Docket Number USTR-2018-0026 Request for Comments Concerning Proposed Modification of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation:

August 13, 2018: The due date for filing requests to appear and a summary of expected testimony at the public hearing and for filing pre-hearing submissions is extended from July 27 to August 13, 2018.

September 5, 2018: The due date for submission of written comments is extended from August 17 to September 5, 2018.

August 20-23, 2018: The scheduled start date of the Section 301 hearing (August 20) has not changed. The Section 301 Committee may extend the length of the hearing depending on the number of additional interested persons who request to appear. The Section 301 Committee will convene the public hearing in the main hearing room of the U.S. International Trade Commission, 500 E Street SW Washington DC 20436 beginning at 9:30 am on August 20, 2018.

September 5, 2018: The due date for submission of post-hearing rebuttal comments is extended from August 30 to September 5, 2018.

How to Participate in Hearings:

The Section 301 Committee will convene a public hearing in the main hearing room of the U.S. International Trade Commission, 500 E Street SW, Washington DC, 20436, beginning at 9:30 am on August 20, 2018. You must submit requests to appear at the hearing by August 13, 2018.

The request to appear must include a summary of testimony, and may be accompanied by a pre-hearing submission. Remarks at the hearing may be no longer than five minutes to allow for possible questions from the Section 301 Committee.

All requests to appear at the hearing must be in English and sent electronically via www.regulations.gov. To submit a request to appear at the hearing via www.regulations.gov, enter docket number USTR-2018-0026 on the home page and click “search”. The site will provide a search-results page listing all documents associated with this docket.

Find a reference to this notice and click on the link titled “comment now!” In the “comment” field, include the name, address, email address, and telephone number of the person presenting the testimony. Attach a summary of the proposed testimony, and a pre-hearing submission if provided, by using the “upload file” field.

The file name should include both the name of the person who will be presenting testimony and the entity they represent. In addition, please submit a request to appear and a PDF of the summary of proposed testimony by email to 301investigation@ustr.eop.gov. In the subject line of the email, please include the name of the person who will be presenting testimony, followed by “request to appear”. Please also include the name, address, email address, and telephone number of the person presenting testimony in the body of the email message.

Note: Importers should also be aware of new requirements for customs entry of antiquities and ethnographic art.

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