“A shudder reverberated through the global technology sector as the Trump administration considers tariffs on Chinese imports including consumer electronics,” Mark Gurman reports for Bloomberg. “Under the most severe scenario being weighed, the U.S. could impose tariffs on a wide range of Chinese imports from shoes and clothing to tech gadgets, said two people familiar with the matter, who asked not to be identified because the discussions aren’t public.”
“Apple Inc., Amazon.com Inc. and other U.S. technology companies that have products assembled in China may be hurt by such policies,” Gurman reports. “Consumer electronics companies in China looking to make headway in the U.S., including Xiaomi Corp. and Lenovo Group Ltd., may also face new headwinds.”
“The Trump administration is considering combining tariffs with restrictions on Chinese investments in the U.S., which are reviewed for national-security risks,” Gurman reports. “Apple may have the most to lose if Trump’s tariffs define imported goods as all items produced in China — even if the products are designed by American companies. Top U.S. hardware makers from Intel Corp. to Dell Inc. also rely heavily on manufacturing in China, which became the world’s factory floor via a combination of government incentives and cheap labor.”
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“While it’s unclear if Apple would be marked as an importer of Chinese goods, the world’s most valuable company does have a number of key Asian suppliers likely involved,” Gurman reports. “Jun Zhang, an analyst at Rosenblatt Securities, said tariffs would likely be targeted at Chinese manufacturers, rather than U.S. companies with gadgets produced in China.”
Read more in the full article here.
“‘Trade wars are not won, only lost,’ warns Sen. Jeff Flake. This is ahistorical nonsense,” Pat Buchanan writes for The Tribune-Review. “Since Bush I, we have run $12 trillion in trade deficits, and in this century’s first decade, we lost 55,000 factories and 6,000,000 manufacturing jobss. Does Flake see no correlation among America’s decline, China’s rise and the $4 trillion in trade surpluses Beijing has run up at the expense of his own country?”
“The hysteria that greeted Trump’s idea of a 25-percent tariff on steel and a 10-percent tariff on aluminum suggests that restoring this nation’s economic independence is going to be a rocky road,” Buchanan writes. “In 2017, the U.S. trade deficit in goods was almost $800 billion, $375 billion of that with China. If we are to turn that into an $800 billion surplus, sacrifices will have to be made. If we are not up to it, we will lose our independence, as the EU countries have lost theirs.”
“We need to shift taxes off goods produced here and impose taxes on imported goods. A tariff on the nearly $2.5 trillion in goods we import, rising gradually to 20 percent, would initially produce $500 billion in revenue, which could eliminate and replace all taxes on domestic production. As prices of foreign goods rise, U.S. products would replace them. There’s nothing we cannot produce here. And if it can be made in America, it should be made in America.”
“Assume a Lexus costs $50,000 in the U.S. and a 20-percent tariff raises the price to $60,000. What would Japan’s Lexus do? It could accept the loss in U.S. sales, cut prices to hold U.S. market share, or shift production to build cars here and keep its market,” Buchanan writes. “The idea of a policy of economic nationalism to turn our trade deficits (which subtract from GDP) into trade surpluses (which add to GDP) is not to keep foreign goods out, but to induce foreign companies to move production here. We have a strategic asset no one else can match: the U.S. market.”
Abridged article in full here.
Buchanan’s unabridged article is here.
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Apple Macs caught up in President Trump’s aluminum tariff plan – March 2, 2018
[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]