US tariffs on China-made consumer tech goods seen cutting sales, delaying upgrades

The two countries have been at odds since July 2018 over a host of US demands that Beijing adopt policy changes that would better protect American intellectual property and make China’s market more accessible to US companies. — Reuters pic
The two countries have been at odds since July 2018 over a host of US demands that Beijing adopt policy changes that would better protect American intellectual property and make China’s market more accessible to US companies. — Reuters pic

WASHINGTON, June 25 — US consumers will delay or forgo technology upgrades if President Donald Trump imposes a new round of 25 per cent tariffs on Chinese goods, slowing the US innovation engine, technology industry executives said yesterday.

Trump’s administration is preparing to levy tariffs on an additional US$300 billion (RM1.24 trillion) worth of Chinese imports after a public comment period ends on July 2 if the US and Chinese presidents cannot relaunch talks to end their trade war.

The two countries have been at odds since July 2018 over a host of US demands that Beijing adopt policy changes that would better protect American intellectual property and make China’s market more accessible to US companies.

Consumer technology products, including cellphones, laptop and tablet computers, smart speakers and video gaming consoles, would make up US$167 billion of that US$300 billion total, or more than half the target list, said Sage Chandler, vice president of international trade for the Consumer Technology Association.

Chandler told a hearing on the tariffs hosted by the US Trade Representative’s office that imposing the tariffs would raise the retail price of cellphones by an average of US$70, while the price of laptop computers would rise by US$120 and video game consoles by US$56.

“A lot of consumers will look at that and say: ‘I’ll just wait for the next generation.’ That’s a lot of money for the average consumer,” Chandler told Reuters.

Chandler, whose association represents major tech groups including Apple Inc, Facebook Inc, Alphabet Inc’s Google and Intel Corp, told the hearing the proposed tariffs would extend a ripple effect that would spread through the US economy.

“Because technology is now the backbone of so many other industries — from agriculture to manufacturing — taxes on technology hit far beyond the technology industry,” Chandler said.

Win Cramer, founder and chief executive of JLab Audio, a California-based maker of Bluetooth wireless headphones, said he added eight employees after the company’s products were spared from the previous round of tariffs. But Cramer said he may have to lay off some of those people, as a 25 per cent tariff would shrink sales.

“The proposed tariffs on products that make up 80 per cent of our business would be catastrophic. We would be forced to lay off employees and raise prices to consumers,” he said. “The factory jobs that build our products never existed in America.”

Other company executives from industries ranging from food equipment to fashion products repeated a refrain from five days of hearings last week — that they relied heavily on China for production and it would be extremely difficult and costly to shift their supply chains to other countries, taking two to three years to do so.

Christine Robins, chief executive of Georgia-based gas barbecue grill maker Char-Broil LLC, said the tariffs would force the company to raise prices, increasing the risk that large retailers would try to cut costs by contracting directly with Chinese factories for private-label grills and “squeeze out” established US brands such as Char-Broil. — Reuters

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