The US China Trade War is Seen Having a Minimal Effect on Tech Industry

With President Trump’s decision to impose tariffs on Chinese imported products, the US-China trade war accusing China of unfair practices related to the forced transfer of American technology and intellectual property. The first round of tariffs on Chinese goods has been imposed but it seems that US tech companies have little impact so far from the trade disputes. On 818 imported Chinese products, the US is imposing an additional 25 percent duty that is about $34 billion worth. This list excludes commonly purchased products such as mobile phones and televisions. The products which come under the “Made in China 2025” industrial policy are targeted. The policy covers industries such as aerospace, robotics, industrial machinery, new materials, and automobiles.

The Chinese products that got impacted by the heavy tariff include engines, motors, generators, furnaces, pumps, compressors, machine tools construction and agricultural equipment. Other products such as aircraft and aircraft parts, cars, trucks, oil, and gas drilling gear, television cameras and broadcast gear are also affected by the increased duty. In response to the US charging a heavy tariff on Chinese products, China also retaliated with 25 percent tariffs on US imports. The goods that impacted include grains, corn, soybeans, meat, fish, dairy, nuts, fruits and vegetables, alcohol and tobacco. 

Trump administration is also planning a second wave of tariffs that cover 284 Chinese items worth $16 billion but till now the implementation date is not yet declared. While the tariffs on both sides have a small direct headwind to IT hardware and semiconductor companies, there are a few ways to impact companies and this include industry that procure components and materials that import from China can see a rise in their cost. The US imports computer hard drives from China, also  U.S. data storage systems vendors Seagate Technology and Western Digital should see a minimal impact since all of them have their subsidiary industries outside China.