President Trump has announced an additional tariff of 10 percent on the remaining 300 billion dollars of goods and products coming from China into the U.S. This does not include the 250 Billion dollars already tariffed at 25% in May.
The U.S. imported a record $539 billion in goods from China in 2018 with computers and electronics accounting for $186.5 billion, and electrical equipment accounting for $49.9 billion.
President Trump has stated that the move to tax China has
not led to any inflation even though the U.S. is taking in billions of dollars. He believes that U.S. consumers will not see any increase to price in Chinese consumer goods, and that the tariffs will only affect China.
The two countries are still in talks, but unless an agreement is reached the tariffs will come into effect on September 1.
According to Trump, “For many years, China has been taking money out by the hundreds of billions of dollars a year. We have rebuilt China. So now it’s time that we change things around. If they don’t want to trade with us anymore, that would be fine with me. We’d save a lot of money.”
The consumer tech industry is thought to be one of the most affected by the new tariffs, as many parts comes from China. The original proposed 25 percent tariffs were estimated to add $70 to the cost of every cell phone entering the country from China.
The trade war between China and the U.S. has not just been financially motivated with the U.S. government voicing growing concerns that Chinese technology is a threat to the country’s internet and telecommunications security.
In May 2019, the U.S. government barred U.S. telecom networks from using telecom equipment from companies that posed a national security threat. Huawei is the largest company to be subjected to the law although the company filed a motion for summary judgment as part of the process to challenge the constitutionality of Section 889 of the 2019 National Defense Authorization Act (2019 NDAA).
Trump remarked on August 1, “we’ve not changed on Huawei. We’re not allowing Huawei into our country. We’re not changed on that. We can do business for non-security things with Huawei because that’s — you know, we’ll do that. But anything having to do with national security, we’re not dealing with Huawei.”
Huawei has previously denied security allegations. Huawei’s chief legal officer, Song Liuping said in statement in May 2019, “The U.S. government has provided no evidence to show that Huawei is a security threat. There is no gun, no smoke. Only speculation.”