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President Trump announced that he will impose 25% tariffs on Chinese imports worth roughly $50 billion. The tariffs, first proposed in April, are the result of a Section 301 investigation that found China’s technology transfer policies had harmed U.S. companies.
The first round of these tariffs will take effect July 6 and will target more than 800 products at the heart of the Made in China 2015 initiative, including “industrially significant technologies.” These 800+ products are valued at $34 billion in trade value and come from industries like aerospace, robotics, and automobiles, but excludes most consumer purchased goods like televisions and cellphones. We encourage you to review this list as it includes many tariff codes that the electronics industry uses to import goods.
In May, IPC sent a letter to the U.S. Trade Representative warning that the Section 301 action could harm U.S. manufacturers because the proposed tariffs primarily target the supply chains of U.S. companies that are least able to weather cost increases. Please continue to keep us informed about how these tariffs are affecting your businesses so we can align our advocacy goals accordingly.
The Trump Administration plans to impose a second round of tariffs valued at $16 billion in trade that were not on the original list proposed in April. This second list will have to undergo public comment and review before being finalized. We will be studying the new list and its likely impact on the electronics industry.
China has indicated that it plans to impose retaliatory tariffs in response to increased U.S. duties, and top U.S. trade officials have said the U.S. will respond in kind — raising concerns that a trade war may erupt unless the two countries can negotiate an agreement.
U.S. and Chinese trade officials continue to negotiate. The Trump Administration has suggested the new tariffs are designed to ratchet up pressure on China to make concessions. To that end, the President has the flexibility to delay the duty increases up to 180 days depending upon progress in the negotiations.
Earlier this year, the U.S. imposed steel and aluminum tariffs on most countries around the world including China. China has already responded with retaliatory tariffs as have other countries. Those tariffs are already being felt by U.S. manufacturers — including those within the electronics industry — that cannot source domestically the steel and aluminum they need. The Trump Administration is also planning to impose new investment restrictions and export controls against China that would curb Chinese acquisition of “industrially significant” technology. An announcement on these new controls is expected by June 30.
Contact Chris Mitchell, IPC vice president of global government relations at ChrisMitchell@ipc.orgfor more information.