With Most Smartphones From China, Costs Would Rise in Planned Tariffs, CTA Tells USTR
About three of four smartphones imported to the U.S. come from China, and those would rise in cost by 22 percent under U.S.-proposed fourth tranche 25 percent duties, said a study for CTA, posted Tuesday in docket USTR-2019-0004. Tariffs would…
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generate a 14 percent cost increase in phones shipped to the U.S. from all countries, it told the U.S. trade representative. The average phone retail price would rise about $70, it said. U.S. consumers will be “forced to reduce overall purchases by 28 percent,” it said. Tariffs on Chinese laptops and tablets imported to the U.S. under Harmonized Tariff Schedule’s 8471.30.01 subheading would raise pricing by 19 percent, said the study. It estimates the retail price of the average laptop would rise $120. Tariffs on videogame consoles imported from China would seriously harm U.S. consumers, said Microsoft, Nintendo and Sony Interactive Entertainment in rare joint comments by the rivals for the removing HTS 9504.50.00 goods from List 4. In 2018, more than 96 percent of the consoles imported to the U.S. came from China, they said. “It would cause significant supply chain disruption to shift sourcing entirely to the United States or a third country, and it would increase costs -- even beyond the cost of the proposed tariffs -- on products that are already manufactured under tight margin conditions.” Proposed penalties on semiconductors and the IT industry “will harm America’s tech companies, and are an ill-equipped tool” to curb China’s “problematic” trade practices, said the Semiconductor Industry Association. The administration’s previous tariffs “encompass nearly the entire semiconductor supply chain,” said SIA. The proposed List 4 tariffs “now threaten virtually all information technology products -- and purchasers of semiconductors -- including key consumer products,” it said. Also, Tuesday was Day II of USTR hearings on proposed List 4 duties, which will stretch to June 25 (see 1906180030).