China’s electronics sector has the most to lose if US increase trade war tariffs to 25 per cent
- The 90-day tariff truce agreed between the US president and Chinese counterpart Xi Jinping is set to expire on March 1
- Negotiators are set to meet in Washington this week, with Chinese Vice-Premier Liu He set to again meet US counterparts Robert Lighthizer and Steven Mnuchin
March 2 is a date that is marked clearly in the calendars of every Chinese company that sells to the United States: tariff day.
On that day, should negotiators not reach a deal that would end the US-China trade war, tariffs on exports to the US will rise from 10 per cent to 25 per cent, but some will be watching more closely than others.
Whereas other sectors – such as textiles, apparel, cars – have had to deal with some import tariffs as a condition of selling into the US in the past, electronics and electrical products traditionally have not.
Among economists, these sectors are viewed as being most at risk from tariff hikes as not only will they have to pay more money, but they also have less experience in the dark arts of tariff avoidance used in other industries.
“They are used to dealing with close to zero duties in the US. This would be a huge hit to their products. They’ve not been taxed going into the US, but now they could face 25 per cent,” said Angelia Chew, managing partner at consultancy firm AC Trade Advisory.
Jing Yuan is the deputy general manager of a company in Hebei province near Beijing that makes multimedia electronic lectern podiums and tablet charging trolleys for use in the education sector and 70 per cent of the company’s exports go to the US.