SIIA Fears Tariffs on Tech Goods Would Force Smaller US Firms Out of Business

With 90 percent of U.S. laptops and more than 75 percent of smartphones sourced from China, “there is simply insufficient capacity in the rest of the world to absorb production shifts of these high-demand devices in the short term,” commented the Software & Information Industry Association, posted Tuesday in docket USTR-2019-0004. If the List 4 Section 301 tariffs on those products are implemented, “U.S. producers would have to either sacrifice profits on U.S. sales or pass increased costs on to consumers by raising prices,” said SIIA. “In the low-margin and high-risk consumer hardware business, few if any U.S. firms would be able to absorb a 25% surcharge on products without losing significant market share to foreign competitors who are not burdened by such additional costs.” SIIA fears “many smaller U.S. firms in these sectors would simply go out of business, while larger firms would become less competitive globally." And "raising prices at this time of year further risks missing production goals for the critical holiday season.” That can “damage annual sales targets” and risk compromising the “the long-term viability of a product,” the group said. Post-hearing rebuttals were due Tuesday, ending the List 4 rulemaking proceeding. President Donald Trump put the List 4 tariffs on hold after agreeing to resume trade negotiations with China (see 1907010070 or 1907010015).