i3 - May/June 2018 - 38

Policy

By Sage Chandler

P O L I CY U P DAT E

Don't Let a Trade War
Put You Out of Business

ast month, the Trump Administration proposed tariffs
of up to 25 percent on $150 billion worth of Chinese
goods. Not surprisingly, China immediately retaliated
with its own tariffs against the U.S. on items such as pork, wine
and soybeans. In a scenario when two trading partners start
fighting, it's easy to see how everyone loses. While the administration's intent is to punish China for infractions in intellectual
property, it is U.S. consumers, businesses and commerce that
will suffer from an escalating trade conflict.

Trade involving technology products is
end up footing the bill for new tariffs.
particularly at risk. Tech is America's
For example, the administration sincompetitive advantage and the future of
gled out televisions as one of the largour nation's economy. The consumer
est proposed categories for a 25
technology industry represents more
percent tariff. The tariffs would
than 10 percent of
also apply to many
U.S. GDP, and projecof the sub-assemblies
tions show 2018
of circuit boards
should be a record
that go into TVs and
U.S. consumers,
breaker for the sector.
other electronic disbusinesses and
However, increased
plays. In other
commerce will
tariffs and the loomwords, the tariffs
suffer from an
ing threat of a trade
would hit tech at virescalating trade
war seriously threaten
tually every level of
conflict.
that forecast.
the value chain,
U.S. businesses
which has conseand consumers will
quences for U.S.
38

MAY/JUNE 2018

manufacturing, production and ultimately consumer costs.
With parts of Chapters 84 and 85 of
the tariff code included in the proposed tariffs, there is even more potential to hit consumers. Chapter 85, for
instance, covers nearly all products
relevant to electronic displays and -
according to the Office of the U.S.
Trade Representative (USTR) - represented the largest group of imports
to the U.S. from China in 2016
($129 billion).
To be certain, China puts onerous
requirements on U.S. business, and
our government should address these
issues and demand transparency for
greater IP protection and competition.
Erecting tariff barriers, however,
would reduce American economic
growth and, as we have already seen,
invite retaliation from China.
The tech sector is one of the most
innovative and quickly moving industries in the U.S., as well as in the
global economy as a whole. Supply
chains that are interconnected need
stability and predictability, and
CTA has been working with member
companies to provide input to
the administration.
The Office of the United States
Trade Representative accepted public
comments on the proposed tariffs
through May 11. If you would like
more information on how to get
involved, or to let us know how tariffs
would damage your bottom line, please
email me at schandler@CTA.tech.
Sage Chandler is CTA's vice president,
International Trade.
I T I S I N N O VAT I O N

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How Trump's tariffs could hurt the tech industry

i3 - May/June 2018

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