Trump: next step is to imposte tech tariffs

6 years ago - Published in Fundamental Analysis

The White House isn’t just dismissing technology companies’ concerns about tariffs on China, it’s picking up the pace. Both Reuters and the Wall Street Journal have learned that the Trump administration is likely to formally announce its latest tariffs on Chinese goods within the next few days (possibly as soon as September 17th). Imports for “internet technology products,” circuit boards and other electronics are still likely to become more expensive, although the tariff level is reportedly set at 10 percent, not the originally proposed 25 percent also used for earlier tariffs. The administration may have lowered the tariffs to reduce the chances that companies would instantly raise prices to make up for the higher costs.

The president is also expected to threaten to hike tariffs again to squeeze Beijing at the negotiating table, but the Chinese have shown no public signs of bending.

The lower figure has a dual purpose: Diminishing the impact on U.S. consumers ahead of the holiday shopping season, while helping Republicans on the campaign trail ahead of the midterm elections. While voters give Trump high praise on the economy, numerous polls show the Democrats with a wide advantage, and show a public restive about the president’s trade wars.

Trump, meanwhile, has indicated he has no intention of backing down. On Thursday he tweeted “we are under no pressure to make a deal with China, they are under pressure to make a deal with us.”

In a statement provided to CNBC on Friday, the White House said, “The President has been clear that he and his administration will continue to take action to address China’s unfair trade practices. We encourage China to address the long standing concerns raised by the United States.”

White House spokeswoman Lindsay Walters declined comment on the timing of a possible announcement, but said: “The President has been clear that he and his administration will continue to take action to address China’s unfair trade practices. We encourage China to address the long standing concerns raised by the United States.”

Beijing has rejected pressure from the United States to roll back plans for state-led development of Chinese global champions in robotics, artificial intelligence and other fields.

Washington, Europe and other trading partners say those plans violate China’s market-opening commitments. American officials also worry they might erode U.S. industrial leadership.