Tech Fears Ripple Effects From New US Tariffs on China Related to IP; Rosenworcel Also Concerned
Tech interests fear ripple-effect consumer harms that may result from the Trump administration’s newest proposals to impose 10 percent Trade Act Section 301 tariffs on $200 billion worth of Chinese imports over intellectual property disagreements between the countries. The list of goods targeted for the 10 percent duties, released Tuesday in an Office of the U.S. Trade Representative notice, doesn't include meaningful end-user consumer tech products like TVs. Some networking gear was included, drawing concern from Commissioner Jessica Rosenworcel, CompTIA, CTA, the Information Technology Industry Council and Telecommunications Industry Association.
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Of the roughly half-dozen product codes listed in the notice under the Harmonized Tariff Schedule’s 8528.72.00 family of classifications for finished TVs from China, virtually all are of the non-HD variety and have built-in legacy CRT screens. Shipments of those products to the U.S. were minuscule last year from most countries of origin, including China, said Bob O’Brien, president of Display Supply Chain Consultants, citing International Trade Commission data. He said Foxconn “is a complete loser in this,” until it gets its LCD fabrication plant “up and running” in Wisconsin in a few years (see 1806280053). Wednesday, company representatives didn’t comment.
China views the administration’s latest tariffs threat as “quintessential trade bullying,” said a Foreign Ministry spokesperson Wednesday. “We will take necessary countermeasures to safeguard our legitimate and legal rights and interests. ... Though a trade war is the last thing we want, we are in no way afraid of fighting one."
The administration is imposing more tariffs “without a clear objective or end in sight, threatening American jobs, stifling economic investment, and increasing the prices of everyday goods,” said Information Technology Industry Council CEO Dean Garfield. The U.S. has “the potential to cement lasting change in China’s unfair trade practices and policies -- and it would be a shame to squander it,” he said. “We urge President Trump to delay this unnecessary escalation before more consumers and workers are harmed and instead make a concerted effort to build a coalition while he is in Europe this week and then negotiate with China to achieve tangible commitments including accountability mechanisms and implementation timelines.”
TIA is upset that the new tariff list “includes routers, switches and other telecom goods which are essential components of today’s high-speed networks,” said Cinnamon Rogers, senior vice president-government affairs: This “will inflate the cost of internet access for American business and consumers and pose a needless burden on the U.S. economy.”
“So much advocacy before the @FCC is about avoiding policies that can impose costs on facilities that will slow down #broadband infrastructure deployment,” tweeted Rosenworcel. “But starting a trade war with #China imposes real costs on both businesses and consumers. And yet, on this is issue, silence.” The agency declined to comment.
More tariffs will mean "more pain" for small businesses and consumers, said CTA President Gary Shapiro. "A trade negotiating plan based on mutually-assured destruction with American businesses and jobs in the crosshairs isn't a winning strategy," he said. "Escalation of tariffs and counter-tariffs on parts imported from China will hurt small businesses that assemble and manufacture in the U.S. and also raise prices for American consumers."
CompTIA fears that “very few Americans will be unaffected,” said Elizabeth Hyman, executive vice president-public advocacy. Despite USTR’s commitment to not target consumer goods, the proposed tariffs “will increase the price of products used every day in our homes and offices,” including Bluetooth speakers, smartwatches and other technology products, she said.
If the Chinese tariffs situation “continues to become a problem,” Voxx International late this fiscal year “possibly” will move “certain” manufacturing of printed circuit boards from factories in China to its facility in Orlando, said CEO Pat Lavelle on a Wednesday earnings call. On the “first tranche” of tariffs that took effect Friday, Voxx was able to move “come production” to Taiwan from China “without having the impact” of the higher duties, said Lavelle. Voxx did “reclass” certain products with approval of Customs and Border Protection, “and we were able to get around the individual tariffs there,” he said: “The ones that we’ve gotten hit on are basically lower-value products,” including cables and remotes.