Trump's Tariffs and Tech: Everything You Need to Know (China Threatens Retaliation)

The U.S. is preparing for heavier tariffs on Chinese goods. Credit: ShutterstockThe U.S. is preparing for heavier tariffs on Chinese goods. Credit: Shutterstock

President Donald Trump and his administration’s proposed expansion of tariffs of 25 percent onto roughly $300 billion worth of imports from China has caused the tech industry to respond. The latest round of tariffs may include a number of tech items, including laptops, tablets, headphones, keyboards, solid state drives and more.

Several technology companies, vendors and retailers made their thoughts known in public comments to the Office of the United States Trade Representative (USTR). That was during a period of public hearings that took place from June 17 through June 25. But the tariffs have been delayed several times. The USTR announced in August that some of the the tariffs, including many on tech which were planned for September, have been delayed until December 15.

Trump announced new tariffs on Twitter, but at 10 percent, on the new goods. This was after he briefly suspended the tariffs after beginning new talks with Chinese leader Xi Jinping.

Here’s what we know about the tariffs so far:

Delayed to December 15

In a statement on August 13, the USTR said in a statement that for "certain articles" will see delays until Dec. 15, including "cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing." 

What gadgets do the tariffs affect?

The tariffs are wide-ranging and affect many industries, including technology, agriculture, clothing and metals. There are hundreds of product categories listed on the website for the Harmonized Tariff System (HTS) of the United States. You can read the full list of the latest round of tariffs here.

HTS SubheadingDescriptionThis could affect...
8471.30.01Portable automatic data processing machines, not over 10 kg, consisting at least a central processing unit, keyboard and display.Laptops, tablets
8471.49.00ADP machines, nesoi, entered as a system (consisting of a central processing unit, an input unit, and an output unit).Desktops, All-in-ones
8471.60.20Keyboards for automatic data processing machines not entered with the rest of a system.Keyboards
8507.60.00Lithium-ion batteries.Batteries, external batteries, battery cases
8517.12.00Telephones for cellular networks or for other wireless networks.Smartphones
8517.62.0090Machines for the reception, conversion and transmission or regeneration of voice, images or other data, nesoi.Routers, NAS devices, smart speakers, smartwatches
8517.70.00Parts of telephone sets; parts of other apparatus for the transmission or reception of voice, images or other data, including apparatus for.Repair parts, especially for smartphones
8518.30.20Headphones, earphones and combined microphone/speaker sets, other than telephone handsets.Wired headphones and headsets
8523.51.00Semiconductor media, solid state non-volatile storage devices.Flash memory, solid state drives, USB sticks, SD cards
8528.52.00Other monitors capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471.Flat-panel monitors
8528.72.64Color television reception apparatus w/flat panel screen, video display diagonal over 34.29 cm, incorporating a VCR or player.Flat-panel televisions
9504.50.00Video game consoles and machines, other than those of heading 9504.30.Video game consoles

Other technologies, including discs, batteries, cameras and projectors also appear on the list in various forms.  And, CPU fans, processors (8542.30.01) are also scheduled.

How has China reacted?

In August, China threatened to place tariffs on $75 billion in U.S. goods in Trump follows through on his threats to China. The plan includes tariffs of 5 or 10% on a American products, including oil, agricultural products, automobiles and more. The tariffs are scheduled to start the same days as the U.S. ones - Sept. 10 and Dec. 15.

What do tech companies think?

An HP Spectre x360 laptop. Credit: Tom's HardwareAn HP Spectre x360 laptop. Credit: Tom's Hardware

A number of tech companies have commented on the tariffs publicly, and they all have expressed a wish for, unsurprisingly, categories affecting their businesses to be removed from the list.

Companies that have commented include:

Two notable joint comments have also been written. The first was one from Intel, HP, Dell and Microsoft regarding laptops while another came from Nintendo of America, Microsoft and Sony Interactive Entertainment about the effects on video game consoles.

All of the comments have some commonalities. Many mention the costs of moving existing supply chains out of China to either the United States or other countries in Asia. Additionally, they point out that companies that do not serve the United States as a primary customer base could gain a competitive advantage, as well as brands outside of the United States. (Fitbit, for example, suggested Xiaomi and Huawei would be strengthened as it was affected.)

Additionally, many mention thin margins and the possibility of pushing costs to consumers, especially on low-end, low-priced electronics.

What does this mean for prices?

Xbox One S. Credit: Shutterstock.comXbox One S. Credit:

The Consumer Technology Association, a group representing technology companies, commissioned a study suggesting that the U.S. price of cell phones would rise 14%, video game consoles and laptops would each increase 19%. The price of drones would jump 15%.

In its own public comment, the Entertainment Software Association, which represents the video game industry, wrote that: “the imposition of a 10% tariff rate could place these products out of reach for many consumers – let alone a 25% tariff, which would have an even greater impact, likely causing consumers to purchase fewer consoles, controllers and accessories. This is because console makers will be unable to absorb the tariffs.

Many of these companies suggested prices could go up in their own comments, insisting that they wouldn’t be able to handle the costs.

Why is the government considering implementing tariffs?

In August of 2017, the USTR began investigating the practices of the Chinese government. The investigation included policies and action regarding intellectual property, technology transfer and more.

The USTR and the office of President Donald Trump have deemed China’s policies as restricting commerce in the United States and “unreasonable or discriminatory.”

Due to that, they deemed China’s policies fall under section 301(b) of the Trade Act of 1974, which authorizes the President to take such action.

Update: Aug 13, 10:20 a.m. with news that the Trump administration delayed the 10 percent tariffs to Dec. 15.

    Your comment
  • Gurg
    So US government gets $75 B in tariff revenue but consumers only pay between $45 B to $57 B in increased prices for these luxury goods. The increased prices should go away once those Commie loving manufacturers can move their production back to US or to other friendly countries that treat the US fairly and have non-slave labor. Sounds like a tremendous deal for the US and our economy as $75 >($45 to 57).
  • Lutedogg1
    Good, I'm tired of buying slave labor products from Communist China where they put up nets at Foxconn factories to prevent workers from jumping to death and commit suicide. Their products should have been tariffed a long time ago. They can build automated facilities in the US. It will help our economy and stop slave labor. I don't care if I have to pay more for a couple years and wait for the transition. Hello $35 hourly jobs in America. The monopoly tech giants will make more money when there is actually a middle class in America again. Foxconn said they were going to automate slave labor jobs because they cost too much in China.....pathetic.... ....ohhh....they did it already.
  • mihen
    This was a very well written and neutral article. It didn't take any biased stance for or against the tariffs, just breaking down the facts.
    Personally, I don't think these tariffs will last long. Given the situation in Hong Kong, China can't afford this trade war.