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Trump Delays Tech Tariffs to August 2020

(Image credit: Shutterstock)

The U.S. Trade Representative (USTR) announced Friday that it lifted tariffs on $200 billion worth of goods imported from China. Impacted products included graphics cardsmotherboards and PC cases, as well as some gaming peripherals. Now those goods will be exempt from the increased tariffs levied as part of the trade war between the U.S. and China--at least until the temporary exemption comes to an end in August 2020.

U.S. tariffs on Chinese-manufactured goods have expended to cover hundreds of billions of dollars worth of goods over the last few months. The most recent expansion affected $110 billion worth of products, including the Apple Watch and wireless audio devices, on September 1. A tariff increase from 25% to 20% was also supposed to affect $250 billion worth of goods starting October 1, but the Trump administration delayed the bump to October 15.

Now much of the PC industry--as well as the gaming console market--has been granted a brief reprieve. USTR said in a public docket published to the Federal Register on September 20 that many electronics devices will be excluded from additional tariffs until August 7, 2020. The executive office also published a one-paragraph statement about deputy-level trade discussions between the U.S. and China that took place on September 19 and 20.

"These discussions were productive," USTR said in the statement, "and the United States looks forward to welcoming a delegation from China for principal-level meetings in October." The delayed tariffs along with the exemptions granted on Friday were likely meant to help with those discussions. (President Donald Trump had previously framed the delay of the October 1 tariffs as a "gesture of good will [sic]" to China on its 70th anniversary.)

This delay is the latest way in which the U.S. and China trade war has been unpredictable for U.S. tech companies. Tariffs expand, increase and are then delayed based on how talks between the countries have gone. Huawei goes from persona non grata to a fine company on a whim. Unless the October talks go well, there's no resolution to this conflict in sight. Just more delays of the seemingly inevitable as the countries go head to head.

  • digitalgriffin
    Tariffs on again off again. 10%, 50%, 20%...We appear schizophrenic with all these changes. This plays havoc with businesses including US ones even if they source 100% from the USA.

    I would prefer we keep the tariffs to level the playing field. But this on again and off again BS is just no good all around for stocks, companies pricing, US workers, or our perception around the globe.

    Every few weeks we have to adjust prices on thousands of parts that comprise our products, even though we source 100% from the USA. It creates a lot of stress and uncertainty.
    Reply
  • ssdpro
    So will prices come down? Or were these temporarily put in place to raise prices, adjust the market, and now the margin for the mfg will just be higher? I mean seriously, a 2070 for 499? 5700 for $369?
    Reply
  • blppt
    I would prefer we keep the tariffs to level the playing field. But this on again and off again BS is just no good all around for stocks, companies pricing, US workers, or our perception around the globe.

    The problem is that you don't realize that Trump doesn't really care about "leveling the playing" field---or if he does, it is far less important to him than looking good.

    Since China has yet to cave on his tariff threat (as expected by most people not named Trump), the fiscal hurt on this country keeping these tariffs all up will likely cause his rich and blue-collar supporters to turn on him. Not to mention the hurt extended to his OWN businesses.

    The President has that pesky 2020 election to worry about after all--and since Trump runs on his delusion of being a "great businessman", it would not look good to have the economy stagnant or in recession by next fall.

    Trump is always about Trump. You can apply this to anything he ever does. Watch whenever we have a couple of days of bad Dow performance---Trump will either himself or one of his administration say they expect a deal with China to be 'imminent' or 'looking good'---and Wall Street falls for it over and over again.
    Reply
  • bloodroses
    What's wrong Trump? Afraid the Tariffs will hurt the American public too much and your re-election chance goes out the window? But I thought we were 'winning' ... :ROFLMAO::tearsofjoy::sweatsmile:
    Reply
  • jasonelmore
    If Trump really wanted to hurt China, he'd put capital outflow restrictions on any funding going to China. (from America only) China does this to its citizens, preventing its rich billionaires from investing in America, or from moving their money out of the country in general. Most of the major hedge fund management groups in America are funding China's economic growth. In other words, it's the American capitalist that are weakening national security by investing in the Chinese tech sector instead of the US. (because they can get better returns)
    Reply
  • bit_user
    jasonelmore said:
    If Trump really wanted to hurt China, he'd put capital outflow restrictions on any funding going to China. (from America only) China does this to its citizens, preventing its rich billionaires from investing in America, or from moving their money out of the country in general.
    I heard the US is actually working on restrictions to limit inward investments from China, to match restrictions they currently place on US investors wanting to invest in China.

    ?rel=ugc]https://www.marketplace.org/2018/04/30/us-bid-reciprocity-investment-rules-china-could-backfire/
    jasonelmore said:
    Most of the major hedge fund management groups in America are funding China's economic growth.
    Maybe 10-20 years ago, but not any more. And a lot of those early investors got burned.

    Chinese business law is very different than in western countries - for instance, you could own a controlling stake and still have no say in corporate governance if you didn't have the company's official stamp. It's things like that which a lot of outside investors didn't know.

    By now, I'm sure big investors have learned to navigate the Chinese system, but China is also much more careful about ceding control or profits to outsiders and doesn't really even need outside investment, anyway.
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  • jasonelmore
    ?rel=ugc]https://www.scmp.com/economy/china-economy/article/2186185/us-investment-china-more-doubles-january-despite-trade-war-hi
    Reply
  • bit_user
    jasonelmore said:
    ?rel=ugc]https://www.scmp.com/economy/china-economy/article/2186185/us-investment-china-more-doubles-january-despite-trade-war-hi
    Thanks for posting.

    The closing paragraph is most telling:
    Inward FDI recovered to an estimated US$234 billion in 2018, 34 per cent higher than 2016, bringing net FDI back to US$123 billion, close to the average level in 2006-07, Xing said.
    So, you see that they did clamp down on FDI, as it's only now returning to the 2006-2007 levels.

    They also caution against reading too much into these monthly numbers:
    Frances Cheung ,... warned market observers should wait until first quarter FDI is released in mid-April to obtain a clearer reading of underlying trends because monthly figures can be volatile due to “one-off, big ticket items”.
    So, when they say the US-based investment is up

    So, if US-based investment is currently relatively low, then a large % increase for one month (which might be heavily-skewed by one-time purchase, etc.) does not necessarily contradict what I said.

    AFAICT, the article doesn't list any numbers that reflect what the total US-based investment is. I'd suggest finding those numbers, for multiple quarters or an entire fiscal year.

    BTW, you should also keep in mind that there's a lot of money sloshing around that's looking for returns wherever they can be found. You'll probably find a lot of money going into other developing countries, as well, mostly because those are where the opportunities and bigger growth reside.
    Reply