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The promotional products industry is not the only one paying more to import products from China due to tariffs.
A new report from the Consumer Technology Association (CTA) found that US companies paid an estimated $32 billion in additional tariffs on technology imports between July 2018 and December 2021 due to former President Donald Trump’s tariffs on Chinese-made goods. The figure has so far risen to about $40 billion by 2022, analysts said.
The Arlington, VA-based trade association, which represents consumer technology companies, has called on President Joe Biden to eliminate tariffs on tech goods and inputs to reduce inflation and lower costs in the sector.
Biden is considering lifting at least some tariffs on an estimated $370 billion worth of Chinese goods to curb inflation, which is currently at a 40-year high in the United States. U.S. Treasury Secretary Janet Yellen and China’s Vice Premier Liu met in early July, giving some analysts a hint that tariff cuts could be on the way.
Some senior members of the Biden administration, including U.S. Trade Representative Catherine Tay, favor keeping the tariffs in place. Tay and others believe the tariffs will empower America in the difficult task of getting China to play fair in global trade. Trump imposed the tariffs to combat what he and his supporters describe as China’s bad trade practices.
Since first taking effect on July 13, U.S. companies across industries have paid $145.43 billion in “Section 301” tariffs — which Trump put in place.
According to research from CTA, the tariff has contributed to the growth of domestic technology production and employment and to the increase in the cost of technology products. Connected devices, routers, cables, computers and accessories make up about one-third of the estimated Section 301 tariffs on technology products.
While the tariffs have forced the U.S. tech sector to reduce its reliance on China, the industry has not turned to domestic sources, instead increasing sourcing from countries such as Vietnam, Taiwan, South Korea and Malaysia, the report said.
New data from @CTAtech It shows how # Tariff Imports from China hurt the tech industry, the American economy, and our ability to innovate. The Biden administration must eliminate these harmful tariffs. Read more: https://t.co/3IxaZt0LGC
– Ed Brzytwa 🇺🇦🇵🇱🇺🇸🕊 (@EdBRZA) July 19, 2022
“It is clear that they have not been effective in dealing with China and instead are hurting American businesses and consumers,” said Ed Brizitwa, vice president of international trade. With inflation rising in all sectors of the economy, eliminating tariffs would reduce rampant and harmful inflation and lower costs for Americans.
Some analysts say the tariffs will do little to control America’s current inflation. Researcher Peterson of the Institute for International Economics said removing all tariffs on Chinese goods under Trump would reduce the consumer price index by at most 0.26 percent.
He said imposing the tariffs would “harm American workers and businesses, increase our already crippling trade deficit with China, and jeopardize Washington’s negotiations with Beijing over intellectual-property theft, US security interests.” In a July 18 opinion piece in The Wall Street Journal.
“The administration’s rationale — that eliminating these tariffs could slow inflation — is nonsense,” Lighthizer continued. “When the tariffs in Mr. Biden’s cutback were implemented, they had no price impact on the economy. After implementation, consumer prices have decreased slightly. To the extent the tariffs were passed on to American consumers, they would have created a one-time price increase rather than a price cut or exchange rate hike for Chinese producers, and would not be responsible for today’s inflation.
However, Promo executives said the tariff has contributed to an increase in production in the popular goods industry. Promo executives told ACI Media that a cut or reduction in tariffs on imports from China could lead to price cuts in the industry’s products, but this is far from a given. Suppliers face a number of inflationary and price uncertainties beyond tariffs, which could offset any gains from tariff removal.
Meanwhile, a reduction or reduction in tariffs could force at least some promotional suppliers to increase their sourcing from China, which in recent years has seen companies pull more production from that country due to tariffs and Covid-related concerns. Even with that sourcing change, most promotional products sold in North America continue to be manufactured in China.
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