10% tariffs on certain tech goods from China delayed to Dec. 15

UPDATE: Aug. 13, 2019: The United States Trade Representative has published the lists of product lines that will face 10% tariffs Sept. 1, known as list 4A, and Dec. 15, known as list 4B

“We’re doing this for the Christmas season,” Trump told reporters Tuesday afternoon, according to multiple news reports. “Just in case some of the tariffs would have an impact on U.S. customers.”

Dive Brief:

  • The United States Trade Representative (USTR) said it will delay 10% tariffs on “certain articles” from China, originally slated to take effect Sept. 1, to Dec. 15. These include cell phones, laptops and computer monitors.
  • USTR also said it plans to remove some products on the tariff list “based on health, safety, national security and other factors,” but did not specify what these products are.
  • The remaining items on list four, covering $300 billion worth of imports from China, like base stations used for telecommunications, will still take effect Sept. 1, as President Donald Trump announced in a series of tweets at the beginning of the month. 

​Dive Insight:

The notice from USTR confirms Trump’s announcement from two weeks ago, but with a few caveats. Some electronics, including TV streaming devices and computer accessories will not face tariffs until December.

The 10% tariffs are particularly problematic due to their timing, coinciding with the start of peak season. Many importers are bringing in goods now for the holiday season.

Adjusting business operations on short-notice comes with “a hefty cost” for U.S. tech firms and the consumers of these technologies, said Stefanie Holland, Vice President of Federal and Global Policy for tech trade group CompTIA. 

“We support the Administration’s efforts to address unfair trading practices with China but encourage the Administration to focus on negotiating a strong deal that addresses longstanding structural issues, improves U.S. global competitiveness, and eliminates tariffs,” Holland said in a statement released Wednesday.

The impact of the tariffs could lead companies like Cisco, Dell, HP and Seagate, to raise prices or shift their production and sourcing to Southeast Asia in order make-up for revenue losses, according to an S&P report.

An extension to Dec. 15 for certain items mitigates some of the risk with peak season, but it may be too late for supply chains that initiated a rush soon after the Aug. 1 announcement. 

The tranche four tariffs, in particular, garnered significant attention from the public and media due to the vast number of consumer-facing goods on the list. Many of the items slated for delayed tariffs appear to be consumer-facing goods. 

As with other rounds of tariffs, USTR said it will conduct an exclusion process, whereby companies can submit requests for exclusions on particular products.