Memorandum for the Special Representative for Trade Negotiations
Pursuant to section 202(b) of the Trade Act of 1974 (P.L. 93-618, 88 Stat. 1978), I have determined the action I will take with respect to the report of the United States International Trade Commission (USITC), transmitted to me on February 3, 1978, concerning the results of its investigation of a petition for import relief filed by E.G. Johnson Company on behalf of the domestic industry producing citizens band (CB) radio transceivers, provided for in item 685.25 of the Tariff Schedules of the United States.
After considering all relevant aspects of the case, including those considerations set forth in section 202(c) of the Trade Act of 1974, I have determined that neither of the recommendations of the USITC are appropriate in this case. I have, however, determined that import relief is in the national economic interest and therefore will proclaim a tariff increase with respect to Citizens Band (CB) radio transceivers (except hand-held), provided for in item 685.25 of the TSUS, of 15 additional percentage points in the first year, to be phased down in three percentage point decrements for the following two years. The duty would then revert to its current rate of six percent ad valorem.
Expedited adjustment assistance would be ineffective in helping the industry cope with current problems of severe inventory overhang, low prices, and financial losses.
The import relief recommended by the USITC of a 30 percentage point tariff increase is not in the national economic interest because it would substantially increase costs to consumers. In a time when we are striving to control inflation, this cost would be too high.
The moderate tariff increase over a three year period that I will proclaim will have a much smaller price effect than the 30 percentage point added duty over five years recommended by the USITC. Furthermore, CBs are a final consumer good precluding ripple price effects on other goods.
The moderate tariff increase would enable domestically produced CBs to be competitively priced relative to imports. Domestic manufacturers may be able to expand their share of the market. This could be achieved by utilizing their already developed, but now excess, capacity.
Firms and workers and communities would still remain eligible for adjustment assistance.
This determination is to be published in the FEDERAL REGISTER.
[Filed with the Office of the Federal Register, 1:12 p.m., March 27, 1978]