U.S. tariffs on Chinese goods are set to affect the chip market. That's because several categories of goods affected by the tariffs, the full list of which was finalized earlier this week, are related to semiconductor manufacturing and other aspects of the industry. Companies forced to pay more to import the equipment they need to make their products--or the products themselves--could pass along those costs to the consumer.
President Donald Trump and his administration started to threaten to enforce tariffs on $34 billion worth of goods from China in early July. The preliminary list of products affected by the tariffs was broad, yet it wasn't immediately clear how they would affect tech companies and their customers. However, many companies rely on the low cost of Chinese labor to manage their supply chains, so it's reasonable to expect tariffs to cut into those margins.
Those fears were present when the U.S. tariffs were expected to affect $34 billion worth of goods. As that number jumped to $200 billion a few weeks later, reports indicated that companies like Apple, Sonos and others could feel the pain. That's because their wearable devices, wireless speakers and other products are part of the "data transmission machines" included on the Trump administration's list of tariffed goods.
Now the chip market is caught in the crossfire between the U.S. and China. Members of the U.S. House of Representatives warned on July 27 that the list of tariffed goods would negatively affect the semiconductor industry even though much of the process of making them happens in the U.S. The representatives asked the administration to exclude semiconductor-related goods from the list to preserve the U.S.' market position.
The Semiconductor Industry Association echoed the representatives' complaints. As the association said in a blog post last month about the letter:
"[A] bipartisan group of 49 Members of Congress – led by Reps. Pete Sessions (R-Texas) and Zoe Lofgren (D-Calif.), the House co-chairs of the Congressional Semiconductor Caucus – make a compelling case that tariffs on semiconductors would not accomplish the Administration’s goal of combatting [sic] China’s unfair and discriminatory trade practices. Instead, they would harm U.S. businesses and consumers. SIA shares this position and continues to urge the Administration to not place tariffs on semiconductors and related products."
Those warnings appear to have fallen on deaf ears because the categories affecting semiconductor-related equipment remain in the list of goods affected by the tariffs. Now the chip market and its customers will have to figure out how exactly these tariffs will affect their wallets (Or, in the companies' case, their untold numbers of bank accounts). We'll see if the administration's efforts will do more harm or good in this sector.
Your Trump is the first one statement and there has always been a trade war are contradictory statements and you know it. There has been no trade war until now.
We have used China for cheap goods and as a dumping ground for spent electronics for decades now. They have used the US to take manufacturing jobs away and to steal intellectual property. The manufacturing is not coming back until the average household incomes in the US and China are remotely close which is not happening anytime soon(so goods from said manufacturing is close in cost). The jobs that are being lost now are knowledge jobs like IT, that really should be the focus not the contrived Trade war that the US has no hope of winning.
We import $478 billion vs exporting $115 billion to China. Every percent China taxes via tariffs on exports is over 4 to 1 to the US due to this discrepancy, that is if they do across the board tariffs. A compromise is needed or China will down our economy and since the Chinese economy is a command economy they will be just fine as the trade war continues. We are three decade late to this war and since we sent a vast majority of our manufacturing to China over those years really need to think twice.
Yeah :( I get this feeling my 1070 is going to be longest lasting GPU ever and that is going back 20 years.
Thanks, Trump! Make Europe Great Again!
The insourcing (H1B, H2Bs) and outsourcing of labor has eviscerated the middle-class, BY DESIGN. In fact, throughout all of human history, the mere concept of a "middle-class" is new. For the rest of the world, it's a have/have-not society. A near feudal system, and America is headed towards a neo-feudal (globalists) system as well. What better way to control the populous than to have people vote for you out of fear of "benefits" being taken away than out of feeling empowered to control said government?
The End-Game in this is China devaluing the Yuan in order to keep jobs in China. The last thing the CCP wants is civil unrest from massive unemployment. So, most likely, the devaluation of the Yuan will be countered by the tariffs China imposes on the US. Meaning, a near draw.
My personal theory is that Trump is engaging China like Reagan did to collapse the Soviet Union - via causing their economies to implode. It's a factual statement to say the US economy is in a far better shape than China's. It's well known they've cooked the books for a very long time now, and their debt to GDP ratio is "very bad".
Actually, no... It has benefited both the US and China greatly. China has gotten the capital to build an industry and associated infrastructure, whereas the US has gotten cheap tech, enabling her to focus on more fruitful endeavors.
Exports aren't inherently good and imports aren't inherently bad.
That's not to say the US doesn't have it's problems, but to focus on the US-China trade relationship is counterproductive.