Tech companies were sounding hopeful Friday after President Donald Trump tweeted that the U.S. and China had struck a trade deal that will prevent a new round of tariffs and potentially roll back some of the existing ones.
“We’re pleased Presidents Trump and Xi have agreed to a ‘phase one’ deal that begins to roll back harmful tariffs, increases IP and tech transfer protections for American companies, further opens China’s financial market, and stabilizes this critical trade relationship," said Jason Oxman, president and CEO of ITI, the Information Technology Industry Council.
While consumer tech got a reprieve, the tariffs included on routers, circuit assemblies and networking equipment. Tech groups have said that could slow the rollout of 5G and closing the digital divide.
ITI members include Amazon, Apple Facebook, Ebay and Google.
ITI and others have argued that the tariffs are a trade war with consumers and U.S. businesses as collateral damage.
Consumer Technology Association president Gary Shapiro, who has branded the President's tariffs as the worst economic mistake in the past 100 years, was equally hopeful.
The following statement is attributed to Gary Shapiro, on the announcement of a “Phase One” trade deal with China and administration’s decision to reduce existing tariffs and postpone List 4B tariffs on Chinese imports:
“We applaud President Trump for making an initial deal with China that enforces fair trade practices and addresses critical tech priorities including intellectual property (IP) protections and forced technology transfer," said Shapiro. "It is a significant step toward ending this costly trade war. The partial tariff rollback is also welcome news.
“We look forward to learning more detail on the tariff removal and urge the White House to make those rollbacks quickly and permanently. Achieving IP and tech transfer concessions is important, and we also encourage the Chinese government to make needed their necessary changes transparently and swiftly."
While Shapiro was pleased that the bleeding may be stopped, that does not mean that injury has not already been inflicted.
CTA estimates that the trade war with China has cost the U.S. consumer tech industry $17.5 billion, including $1.6 billion on 5G products.
“Tariffs are taxes on Americans – not the Chinese. The postponement of the next round of tariffs may temporarily protect American consumers from price increases on today’s essential tech devices – including smartphones, laptops and tablets. But it doesn’t resolve market uncertainty or return the billions of dollars our nation is already paying in tariffs. Businesses and markets crave certainty and a relief from the volatility caused by the ups and downs of our trade negotiations.
While Trump said existing tariffs remain in place, Shapiro said that is the wrong move. "[W]e urge Presidents Trump and [Chinese President] Xi to continue these negotiations and reach full tariff removal as soon as possible—and that both sides will stop using tariffs as a weapon.”