American import duties on Chinese products hit tech companies

The United States is stepping up its trade war with China. President Donald Trump has announced a further $200 billion in additional taxes on Chinese products. This will have a major impact on network players such as Cisco, Juniper and HPE, because their products will be affected by this. Network equipment is on the list of products, as well as printed circuit boards and other commonly used parts inchapparatuur. Apple gets along well, because a number of products are excluded, including the Apple Watch and Airpods.

On 24 September, the United States introduced additional taxes on products imported from China. According to Trump, this is necessary to compensate for the country’s trade surplus. The direct result is that many technology products are becoming more expensive, because they are often manufactured in China. But after protests from various companies, smartwatches and devices using Bluetooth technology are excluded. Apple will probably have to pay extra charges for the Macs, but the iPhones are not yet entirely clear.

Negative impact

This is not the first time that the United States has raised taxes on Chinese products, but has exempted certain products. In June, for example, a list was drawn up of products from China for which extra taxes had to be levied, and televisions were still exempted. This time, however, the televisions will also have to pay the import duties.

In response to the latest news, Fitbit already announced that this would have a direct impact on its own investments in the United States. And Apple stated that import tariffs would affect a wide range of products, including Apple Watch. Our concerns with these tariffs are that the US will be hit hardest and that the growth and competitiveness of the US will fall back and that, on the contrary, prices for US consumers will rise.

In a reaction on Twitter, the American President called on Apple to build factories mainly on American soil. According to Trump, that would only be good for its own economy and the consumer:

Apple prices may increase because of the massive Tariffs we may be imposing on China – but there is an easy solution where there would be ZERO tax, and indeed a tax incentive. Make your products in the United States instead of China. Start building new plants now. Exciting! #MAGA

— Donald J. Trump (@realDonaldTrump) September 8, 2018

Last March, the trade war with China began. Under Trump, some import duties were introduced on Chinese products. Subsequently, China introduced similar measures and started to counteract them with the planned takeover of NXP by the US company Qualcomm. In the months that followed, more levies were introduced and the Chinese government reacted each time with similar levies on US products.