Although there have been signs that a compromise could be reached between the important world powers, the existing tariffs on China have been renewed. Furthermore, Trump’s statements on Twitter about the Chinese government not having honored trade commitments was followed by a threat to impose another 10% tariff on China on September 1st.
….Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer. As President, I can no longer allow this to happen! In the spirit of achieving Fair Trade, we must Balance this very….— Donald J. Trump (@realDonaldTrump) August 23, 2019
“We thought we had a deal with China three months ago, but sadly, China decided to renegotiate the deal prior to signing,” Trump’s tweet stated. “More recently, China agreed to buy agriculture product[s] from the US in large quantities, but did not do so.”
Some have recently implied that Trump’s most recent attempts to penalize China were milder than those he has threatened to impose on earlier dates, though the fact remains that tariffs of any sort are bad news for the tech sector. The top U.S. brands in retail electronics and devices rely significantly on Chinese manufacturing as well as the American consumer market to be profitable. The last 25% tariffs added $25 to the price of every cell phone made in China, according to recent estimates. One company that has been hit particularly hard by the tariffs has been Apple, which has resulted in the tech giant requesting an exemption for their Chinese made MacPro parts.
Consumers will ultimately bear the brunt of the higher costs, one example being Sony’s Playstation, which will be more expensive once additional tariffs kick in. Price increases will be evident across the entire spectrum of products however. Consumers can expect to pay more for their televisions, laptops and mobile phones that are constructed wholly or in part in China. At this point, the total impact tariffs will have on Main Street can only be speculated.
It’s still not known if exemptions will be granted to some tech companies on certain Chinese manufactured electronic components. Suspense surrounds the president’s long-term tariff policy as well as how it will play out in the big picture. The president’s recent remarks do little to quell the current anxiety in the tech industry.
“We have a long way to go with China,” he said. “We have another $325 billion we can implement, if we want.”
Officials in DC who manage international trade affairs have not provided further detail or reason for those who sell tech products to take a deep breath either.