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Vol. 21 • No. 4
FROM THE EDITOR 3 July/August 2018 • www.cemag.us
U.S.-China Tariff Spat Could
Hit Semiconductor, Electronics
President Donald Trump recently announced that he would seek tariffs on $200 billion of Chinese goods, following up on a 2016 campaign promise to use tariffs in order to cut U.S. trade deficits. The White House has
stated that the tariffs, which will start in July and will initially
target over 800 kinds of products worth $34 billion in imports,
are retaliation for what it claims were years of unfair trade practices by the Chinese government.
China has countered with a similar tax to over 600 U.S.
products worth $50 billion. Back in April, China announced
tariffs on U.S. imports ranging from 15 to 25 percent. Both countries decided to put
the tariff plans on hold in May in order to conduct talks, but that diplomacy has failed.
In total, the Trump administration has threatened to place tariffs on up to $450 billion
worth of goods.
Reactions in the U.S. are mixed. Some of the president’s supporters are cheering him
on for his tough stance against China, and feel that these policies will benefit American
businesses that have suffered under China’s policies. Others are worried that these
actions will escalate into a trade war, hurt American farmers (soybeans and pork are
particularly at risk, say experts), and pose a serious threat to free trade.
Electronics are among the biggest products that the U.S. imports from China. Some
experts have said that the Trump administration will be targeting high-tech goods,
such as electronics and appliances, as opposed to retailers and consumer goods.
The Consumer Technology Association released a statement saying, in part,
“Imposing tariffs on Chinese goods could cost Americans hundreds of thousands
of jobs. The tariff on $50 billion in goods being imposed today is no exception. And
the anticipated retaliation by China will escalate the U.S.-China trade war and reduce
U.S. gross domestic product by nearly $3 billion, based on a CTA and National Retail
Federation (NRF) study on the initial White House tariff proposal.”
American companies such as Intel and Qualcomm typically send their nearly
completed chips to China for assembly, testing, and packaging, which means that
they could be slapped with tariffs when the chips are shipped back into the U.S.
The Semiconductor Industry Association, which represents major U.S. chipmakers,
weighed in on the Trump administration’s tariff plans in a June 18 statement: “While
the U.S. semiconductor industry shares the Trump Administration’s concerns about
China’s forced technology transfer and intellectual property (IP) practices, the proposed imposition of tariffs on semiconductors from China, most of which are actually
researched, designed, and manufactured in the U.S., is counterproductive and fails
to address the serious IP and industrial policy issues in China. We look forward to
working with the Administration to explain why imposing tariffs on our products
would be harmful to our competitiveness
and does not address our challenges with