Kylie Addision Sabra
October 10, 2019
From the beginning of the trade war with China, businesses have stressed to determine exactly what it could mean to their employees, their customers, their bottom line. Additionally, constantly changing trade policies have resulted in volatile global markets. This led to a world-wide decrease in innovation, research and development that will impact us long after the standoff resolves.
Instead, companies must focus their attention on supply chain issues caused by the impending fall of the hammer. And, when it does drop on December 15, it will signal the implementation of previously delayed tech tariffs on consumer electronics. Laptops, cell phones, keyboards and monitors are just a few of the tech items on the list–equipment your company needs to function.
Status of Trade War Tariffs as of August 20th
The Office of the United States Trade Representative has finalized tariffs on $200 billion of Chinese imports. According to the report, the initial tariffs ran around 10%, and will level off at 25% in 2019. Will it happen? Most likely, yes. The first wave of tariffs hit in May, followed by the second wave in September. There’s no reason to assume that the hammer will miss the December 15th round.
What Lies at the Root of the Issue?
First is a belief that the trade deficit gives China an unfair advantage. Whether or not trade deficits are inherently bad, or good, is another discussion. But, there is a secondary plot, uncovered in the Section 301 Investigation, which found that China:
- Uses joint venture requirements, foreign investment restrictions, and administrative review and licensing processes to require or pressure technology transfer from U.S. companies.
- Deprives U.S. companies of the ability to set market-based terms in licensing and other technology-related negotiations.
- Directs and unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets to generate large-scale technology transfer.
- Conducts and supports cyber intrusions into U.S. commercial computer networks to gain unauthorized access to commercially valuable business information.
Is a Trade War the Answer?
U.S. tech companies agree that something must be done about China’s behavior. However, they fall short of agreeing that a trade war is the way to handle the problem. Some have joined in filing letters of opposition to the new tariffs. The Consumer Tech Association says tariffs cost the consumer tech industry over $10 billion since July. American taxpayers have paid over $27 billion in additional import tariffs. Most of that price tag is attributable to the U.S./China trade war.
You needn’t be a trade war victim, or feel trapped in the middle. Zen Techworks can assess your technology needs, procure, install and manage this vital part of your business. As a result, you can shift your focus back to engaging with customers, testing new ideas and growing your business. But, time is running out to make important decisions before the December 15 tariffs become a reality.