Chinese Tariffs Costing Tech Industry $1 Billion Monthly in Higher Fees, CTA Says

The three rounds of Section 301 tariffs since July on $250 billion worth of Chinese goods are costing the tech industry more than $1 billion a month in added fees, the Consumer Technology Association reported. CTA teamed with The Trade Partnership to analyze recent U.S. import data and found tariffs on tech products imported from China jumped to $1.3 billion in October, a sevenfold increase from the same month a year earlier. That includes $122 million more in duties on 5G-related imports in October, compared with $65,000.

Though President Donald Trump "made the right decision" when he postponed the latest 25 percent tariff hike for 90 days, the cost of tariffs that still exist "remains an issue," said Sage Chandler, CTA vice president-international trade. The "uncertainty of potentially more tariffs combined with export controls is a real threat to our industry and to maintaining U.S. global leadership on 5G innovation," she said. CTA estimates nearly 70 percent of the tariffs the tech industry pays come from the third tranche of 10 percent tariffs enacted Sept. 24, Chandler said.

CTA thinks it's "almost inevitable" the tariffs will cause an "economic slowdown" if not suspended altogether, Chandler said. "Just look what the tariffs' damage and uncertainty have done to stock markets." It's "critical" the administration negotiates a trade deal with China "with the mindset of ending tariffs and addressing the concerns of forced tech transfers and IP theft," she said.

The third tranche of 10 percent tariffs on Chinese imports automatically rises to 25 percent March 2 at 12:01 a.m. EST if U.S. and Chinese negotiators don’t agree on a comprehensive trade package, according to an Office of the U.S. Trade Representative notice (see 1812140034). U.S. and Chinese leaders met Dec. 1 and agreed “to hold negotiations on a range of issues,” including U.S. allegations of unfair Chinese trade practices as described in the USTR's March 22 Section 301 investigative report, the agency said. “In light of the outcome” of the Dec. 1 meeting, and at the “direction” of Trump, USTR “determined that it no longer is appropriate” to raise the tariffs to 25 percent on Jan. 1, it said.