Trump-era tariffs on Chinese tech imports cost US firms US$32 billion, hurting production and jobs
- US firms paid over US$32 billion in tariffs to import Chinese technology products from the start of the trade war in July 2018 until the end of 2021
- Consumer Technology Association calls for an elimination of tariffs on consumer technology products and inputs amid 40-year-high inflation in the US
Over US$32 billion of “ineffective” Trump-era tariffs imposed on consumer technology imports from China stalled growth in production and employment in the United States, hurting both businesses and consumers, according to a report.
The Consumer Technology Association report released on Tuesday found that American companies have paid over US$32 billion in tariffs to import Chinese technology products from the start of the trade war in July 2018 until the end of 2021, with the figure having likely risen to close to US$40 billion since the start of this year.
It urged US policymakers to eliminate tariffs on consumer technology products to mitigate inflation and lower costs and to eliminate tariffs on inputs to revitalise jobs and manufacturing of technology products.
With rising prices across all sectors of our economy, removing tariffs would mitigate rampant and harmful inflation and lower costs for Americans
“It’s clear that the tariffs have not been effective in dealing with China and are instead hurting US businesses and consumers,” said Consumer Technology Association vice-president Ed Brzytwa.
“With rising prices across all sectors of our economy, removing tariffs would mitigate rampant and harmful inflation and lower costs for Americans.”
US overseas shipments of computers and electronics largely followed the pre-tariff trend, but their worst performance was in the year after the duties were imposed, the report found. Around half of the US$32 billion in tariffs involved computers and electronics, it added.
Shipments of electrical equipment also stagnated after the tariffs were imposed before growing again in mid-2020 as imports from China began to increase again.
Total Section 301 tariffs paid on Chinese goods up to July 6 total US$145.43 billion, according to US Customs and Border Protection.
According to the association’s report, technology companies have said that “they can no longer absorb the costs of tariffs without increasing prices for products”.
“For American consumers, this means the technology they love and have come to rely on is less accessible and less affordable,” the report added.
Imports of technology products affected by the tariffs fell by 39 per cent between 2017- 21, while imports of excluded products grew by 35 per cent, according to the report.
China’s share of US technology imports subject to the tariffs has fallen from 32 per cent in 2017 to 17 per cent last year, the association added.
But the share of products not covered by the tariffs remained at 84 per last year – the same level as in 2017.
However, imports of covered products, including digital cameras, certain cooking appliances and robot vacuum cleaners, have been rising since mid-2020 and are unlikely to fall further, suggesting that the tariffs are no longer motivating companies to “leave China”.
“As the US economy slowly recovers from several years of shutdowns and snarled supply chains, this means that companies are allocating scarce resources toward tariff payments,” said the report.
“Instead, they could be investing in the research and development, equipment, job creation or workforce upskilling that helps bring new and innovative products to market.”
Cancel tariffs and don’t impose new trade measures, commerce ministry urges US
US news outlet Politico earlier reported that Washington is likely to lift some duties on around US$10 billion worth of Chinese imports.
But with around US$370 billion of Chinese goods currently covered by tariffs, the changes are set to only cover a narrow set of consumer goods, such as bicycles.
The biggest beneficiaries of the US-China trade war have been Taiwan and Vietnam, as imports of technology products by the US increased to offset the decline from China, the Consumer Technology Association report said.
While Taiwan saw the biggest increase by value, with its exports of affected products rising by US$23 billion, Vietnam saw a rapid increase in percentage terms, with its exports having risen by 241 per cent between 2017-21.
