US tech companies tried to avert latest China tariffs - Global Trade Magazine
  September 19th, 2018 | Written by

US tech companies tried to avert latest China tariffs

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  • US tech companies are concerned new tariffs will increase the costs of their networking equipment.
  • US tech companies are concerned new tariffs will increase the costs of their networking equipment.
  • “These tariffs are all pain, no gain for American businesses and workers.”

Four major US tech companies sent a letter to the US Trade Representative Robert Lighthizer, asking the administration to reconsider imposing the new tariffs on $200 billion worth of Chinese imports announced on Monday.

The companies, Dell, Cisco, Juniper Networks, and Hewlett Packard, are concerned the tariffs will increase the costs of their networking equipment, leading to the loss of profits and US jobs.

The new Trump tariffs, unlike the $50 billion in Chinese products the president hit in his first tariff phase  in July will affect consumer products such as appliances and furniture, and not only industrial equipment.

United States importers will start pay an additional 10-percent tariff for the specified items next week, a levy which will increase to 25 percent at the end of the year, according to published reports.

“If USTR were to impose a 10 to 25 percent additional duty on networking products and accessories, it would cause broad, disproportionate economic harm to US interests, including our companies and US workers, our customers, US consumers, and broader US economic and strategic priorities,” said the companies’ letter to Lighthizer.

“Given the enormous volume of potentially impacted trade,” the letter went on to say, “the duties would impact over $23 billion in total imports and create potential duty liability for US consumers of between $2.3 billion and $5.7 billion per year.”

The companies are also concerned that the tariffs would hinder innovations important to the US government, such as cloud computing and 5G networks.

“These tariffs are all pain, no gain for American businesses and workers,” said Freedom Partners Executive Vice President Nathan Nascimento. “Countless American employers weighed in on this idea during the comment period and told the administration these tariffs would be job-killers. Unfortunately, their pleas have fallen on deaf ears.”

The new tariffs would cover around half of Chinese goods entering the US. The Trump administration slapped 25-percent tariffs on $34 billion of Chinese imports in July and another $16 billion in August. China has thus far responded measure for measure, but Beijing’s power in this area is limited US exports to China are far lower than trade moving in the opposite direction. China says it will retaliate against the latest round of US tariffs. Trump has said he would then move to tax all Chinese imports.

If the tariffs go into effect, companies could request exemptions, but reporting on the Section 252 steel and aluminum tariffs indicate this is a very slow process.


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