back to article Tech world mulls threat as new round of US China trade tariffs looms

US consumers and businesses shopping for tech in Europe? The rise of manufacturing in Vietnam or the Philippines? The tech industry is braced for the potential consequences of another, wider reaching round of trade tariffs on components or finished goods that are imported to the US from China. Amid Trump-China tariff tiff, …

  1. Spazturtle Silver badge

    "Brazier said he expected a trend - if the trade war continues - of businesses moving manufacturing out of China to other Asian countries. "

    That is literally what these tariffs are designed to achieve.

    The US GDP growth rate is increasing whilst the China GDP growth rate is falling.

    This article highlights the US governments concerns perfectly, there is the risk of China becoming the worlds 3rd major market, the US wants the status quo of the US and EU being the only major markets to remain. With 3 major markets there is the risk that 2 of them could gang up against the other.

    1. Doctor Syntax Silver badge

      "With 3 major markets there is the risk that 2 of them could gang up against the other."

      There's also a risk that dick moves by the other will be what encourages that.

      Meanwhile, here in the UK we won't be in any of those markets. That'll make us safe won't it? Won't it?

      1. BebopWeBop Silver badge

        and no mentiond brexit respect.....

      2. Anonymous Coward
        Anonymous Coward

        >Meanwhile, here in the UK we won't be in any of those markets

        But that's ok. Firms can just move production to countries that are. Like Singapore.

        It's what people voted for!

    2. Anonymous Coward
      Anonymous Coward

      I think you'll find that the current US government, along with their counterparts in Russia, is actively working on breaking up the EU.

    3. Alan Brown Silver badge

      " there is the risk of China becoming the worlds 3rd major market,"

      China's economy surpassed the USA's a couple of years back. India's isn't far behind and Europe has been larger for a while.

      That "status quo" hasn't existed for quite a while - and it's not going to return.

      Geographically China's the same size as the USA lower 48 and economically it's still only just getting back on its feet after 250 years of setbacks (FWIW, up until the industrial revolution China's technology and wealth was more than any other country. China was badly nobbled by energy resources being mostly inaccessible (behind impassible river gorges/mountains) compared to European and American ones. Then it got invaded and "colonised" for a while. Opium wars and gunboat diplomacy, etc)

      We're seeing the return of the Silk Road, 500 years after the Portuguese destroyed it by strategically knocking out critical points under Khanate control(*) - only this time it's China driving business on the road, not the Mongolians.

      (*) Such as where it passes through what's now Burma.

      1. Spazturtle Silver badge

        "China's economy surpassed the USA's a couple of years back. "

        Maybe in GDP but not in purchasing power, it is the markets that import more then they export that hold the power. If the US refuses the buy things from China then China loses money, if China refuses to sell to the US then it is also China who loses money.

    4. Christoph Silver badge

      "With 3 major markets there is the risk that 2 of them could gang up against the other."

      What would you call the three rival trade blocks? How about Eurasia, Eastasia, and Oceania?

    5. Kimo

      Not what we are told they are intended to do.

      The pro-tariff argument is that it will bring jobs to the US. But the effect will be to move jobs to other Asian countries that already have the infrastructure to build the consumer products that the US buys.

  2. Anonymous Coward
    Anonymous Coward

    So is there scope here...

    ...for us Europeans to make a mint buying up stuff from China and selling it on to the US at "only" a 10% mark-up?

    I'd say "us British", but then we would have to get it all in through Dover and back out again from next year.

    1. MacroRodent Silver badge

      Re: So is there scope here...

      ..for us Europeans to make a mint buying up stuff from China and selling it on to the US at "only" a 10% mark-up?

      Yes, until The Donald slaps more tariffs also on EU imports.

  3. not.known@this.address Bronze badge
    Facepalm

    Foot, meet bullet

    Here's a thought - if these companies had spent less time trying to squeeze every penny saving from their suppliers, they wouldn't be totally dependent on China for the vast majority of their manufacturing. And since most of them are also heavily invested (or, more accurately, *not* invested!) in Lean Manufacturing and Just-In-Time ordering, it's not like they have any stockpiles they can fall back on is it?

    1. DougS Silver badge

      Re: Foot, meet bullet

      The low end unskilled manufacturing is already leaving China because they're too expensive. Companies will keep moving until there are no poor people left to exploit.

      1. bombastic bob Silver badge
        Devil

        Re: Foot, meet bullet

        "Companies will keep moving until there are no poor people left to exploit."

        at which point it'll be "lights out" manufacturing with robots.

        yeah, seen this coming. It's also a potential solution to the tariff thing.

        Currently Mexico looks better than China for 'off-shoring' and has for quite a while now. Maybe they can hire those people from the 'caravan'...

        [this is what 'push back' looks like, by the way, instead of always bending over and getting 'surprised']

        1. missingegg

          Re: Foot, meet bullet

          Does it have to be either or? In the past I've found the combination of bending over and pushing back has resulted in a most satisfying, er, "transaction".

          I'll get my coat now.

  4. Steve Davies 3 Silver badge
    Facepalm

    Just you wait...

    The US Customs people will soon start opening up all the bits of kit suppsedly made in say Mexico or Germany and if they find one component with a 'Made in China' sticker on it, then they'll impose the 10% or whatever the tariff is on the whole thing and not just on one component.

    I see need for facilities in say Vietnam where goods made in china arrive at one end and emerge at the other with a variety of origin stickers on them (Malaysia, Indonesia, India etc) just to get around the Trump Trade War which he can't win.

    1. 2+2=5 Silver badge

      Re: Just you wait...

      > The US Customs people will soon start opening up all the bits of kit suppsedly made in say Mexico or Germany and if they find one component with a 'Made in China' sticker on it, then they'll impose the 10% or whatever the tariff is on the whole thing and not just on one component.

      I knew that one day the whole confusion over the 'China Export' / CE standards mark business would turn out to have a silver lining: just say the kit was all made in Europe - look it's even CE marked.

      1. bombastic bob Silver badge
        Meh

        Re: Just you wait...

        about CE marks... it's actually a set of testing you have to do to comply with the regs. I could get CE testing with electronic stuff made in USA, and would have to in order to export it to the EU. Just sayin'. There's a lot with that, including ROHS and something similar to FCC testing requirements as I recall. I forget the details, I just remember a 'used-to-company' dealing with that for its products. A completed device had to be ground up and chemically analyzed to prove it complied with ROHS, for example.

    2. Doctor Syntax Silver badge

      Re: Just you wait...

      "the Trump Trade War which he can't win."

      Of course he can. Didn't he tell us they were easy to win?

      1. Michael Wojcik Silver badge

        Re: Just you wait...

        Of course he can. Didn't he tell us they were easy to win?

        To be fair, Trump can win the trade war. There will be ample opportunities for graft. It's the US that can't win it.

    3. Anonymous Coward
      Anonymous Coward

      Re: Just you wait...

      "The US Customs people will soon start opening up all the bits of kit suppsedly made in say Mexico or Germany"

      I thought it was an established fact (endorsed by experts) that it is impossible to open up all th ebits of kit being imported

  5. Haefen

    Tariffs should have always been in place.

    There should have already been a tariff structure in place to ensure products are being made under similar environmental, human rights, and labour laws.

    Allowing manufacturing to move from countries with enforced environmental, human right, labour and workplace laws has resulted in punishing those concerned about people and the planet.

    Bring in massive tariffs, move manufacturing, stop punishing those Nations that want a better planet and all people to have basic human rights.

    Free trade isn't fair trade unless both markets operate under the same rules.

    1. Anonymous Coward
      Anonymous Coward

      Re: Tariffs should have always been in place.

      Allowing manufacturing to move from countries with enforced environmental, human right, labour and workplace laws has resulted in

      ..massive increases in living standards, education and health in under-developed countries that formerly survived on subsistence farming?

    2. Warm Braw Silver badge

      Re: Tariffs should have always been in place.

      similar environmental, human rights, and labour laws

      I can't see that going down well in the only country to pull out of the Paris climate accord and where "employment at will" is a widespread practice.

    3. bombastic bob Silver badge
      Devil

      Re: Tariffs should have always been in place.

      "There should have already been a tariff structure in place to ensure products are being made under similar environmental, human rights, and labour laws."

      you have a point. countries that enable exploitation (child labor, slave wages, dangerous working conditions, etc.) are already subject to things LIKE import bans for humanitarian reasons, to the best of my knowledge.

      It's not unusual at all to see anything like this.

  6. Alan Brown Silver badge

    If China's smart

    Then it uses this as an opportunity to shut US brands out of the rest of the world.

    Any USA brand which crossships things via the USA (or does partial assembly in the USA) is going to be at a severe disadvantage outside the USA compared to any other maker who doesn't - and contrary to its own belief, the USA isn't the largest market in the world anymore. A slowdown in supply into North America can easily be made up by "rest of the world" sales.

  7. Deckard_C

    US Exports

    Won't the tarriffs hit US manufacturing exports? as they will have to pay the tarriffs on any components imported from China. Or even if they don't use the China sourced components they loose the advantage of be able to use those cheaper components.

  8. MJI Silver badge

    Very bad for US business

    Look at airliners.

    The Chinese will look at Airbus over Boeing, with RR engines.

    Lots of money there, lots of potential to hurt the US (but help Europe)

  9. Anonymous Coward
    Anonymous Coward

    In hindsight, Trump should've built two or three factories to produce kit in the USA before starting this trade war.

    On the other side of the coin, China is "colonizing" Africa - with the sole intent of stripping Africa of its mineral wealth for next to nothing. What they do is to offer a major big loan (one which the receiving country will not be able to pay back), then they start taking bits and pieces of that country in lieu of payment.

    The sooner the US of A and Europe wake up to this fact, the better.

    Pterry's Interesting Times spring to mind.

  10. spold Bronze badge

    The new Silk Road thing mentioned is actually very real in China and underway - it's called One Belt One Road, it will make use of the markets and capabilities it "flows" through (spurs also include Africa). Since this encompasses manufacturing as well as retail then establishing a country of origin will be interesting.

    With rising salary and other costs in China, they have already been outsourcing some production and assembly to other cheaper markets, e.g. Indonesia - which is one of the endpoints of the the Belt and Road.

    (BTW this also links to Vision 2046 - when Hong Kong is entirely integrated into China and One China Two Systems disappears - the vision is that then Hong Kong will be the Financial Engine, Shenzhen will be the R&D engine, and the wider Guangdong province (+ Belt and Road) does the manufacturing.)

  11. Anonymous Coward
    Anonymous Coward

    Looks like excuses for a price rises, actual cost of import tariff + 10%.

  12. the Kris

    Compensating tax cuts

    Trump is compensating tax cuts for the rich with import tariffs that are eventually paid mostly by the middle class US buyers.

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