Wed. Aug 21st, 2019

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Big Tech Companies Ask To Be Excluded From The China Tariffs.

3 min read

Unless you have been living under a rock, everyone knows about the escalating trade wars between China and the US. More than half a dozen big tech companies wrote to the Trump Administration last week asking it not to hit the products they produce in China with additional tariffs. The White House has proposed a bill that would place a 25% tariff on $300 billion in Chinese goods not already subject to tariffs. The tariff would apply to a wide range of products, from live buffalo and primates to T-shirts and shoes. It would also cover laptops, video game consoles, battery cases and other products.

Tech companies say that would increase costs for consumers or harm their abilities to make a profit.
Apple, Dell Technologies, HP, Intel, Microsoft, Sony and Nintendo asked that their products be excluded from the list of goods the tariff would apply to. The Consumer Technology Association also submitted a letter asking the government to develop a process for companies to request that their goods be excluded from the tariff, arguing that increasing tariffs is the wrong way to improve the US-China trade relationship. Last month, the US raised tariffs on $200 billion worth of Chinese exports from 10% to 25%. China responded by increasing tariffs on American goods, such as cotton and grain. The two countries have also been swapping other retaliatory measures, including a US export ban on Chinese smartphone company Huawei.
The trade dispute has forced some tech companies to look beyond China for new locations, mostly in Southeast Asia to produce their goods. But leaving China is a slow and costly process. This is because the country has for decades amounded the infrastructure, talent and suppliers needed for manufacturing. In a letter written by Apple, they argued that it is the largest US tax payer corporate. Also in the letter they said that they are responsible for providing about 2Million jobs. Also included in the letter was that additional tariffs would reduce the job contribution, thus threatening Apple’s ability to compete with foreign technology companies. Apple attached a list of many products including iPhones, MacBooks and AppleTVs that it wants excluded from the said tariff.

In a different letter from Dell, HP, Intel and Microsoft, they asked the government to leave their products from the list of goods covered by the tariff. The companies said the tariff could raise the average retail price of a laptop by $120. This was a citing a study from the Consumer Technology Association. Another letter from Sony, Nintendo and Microsoft asked that video game consoles be excluded. Nobody really wants to be in this mess.
The Consumer Technology Association in its letter asked Trump to abandon the tariff strategy altogether. Specifically mentioning the G20 meeting as a chance to begin improving US-China relations. “We further urge the administration to leverage multilateral action, join strategic trade agreements that move China toward transparency, competition and open markets,” the letter reads, “while resisting the imposition of taxes and trade barriers that would continue to harm American interests, risk our economic future and jeopardize our technological leadership.”