U.S. tar­iffs on Chi­nese tech­nol­ogy would slam con­sumers, study says

USA TODAY International Edition - - MONEY - Paul David­son

Amer­i­can shop­pers would pay about 23% more for TVs, com­puter mon­i­tors, bat­ter­ies and printer ink and car­tridges made in China if Pres­i­dent Trump fol­lows through on a tar­iff he has threat­ened to im­pose on a broad range of tech­nol­ogy im­ports from that coun­try, ac­cord­ing to an in­dus­try study.

That in­crease is sub­stan­tially more than the 10% to 15% price hike pre­vi­ously es­ti­mated by an­a­lysts and economists. It was cal­cu­lated by Trade Part­ner­ship World­wide, a con­sult­ing firm, for the Con­sumer Tech­nol­ogy As­so­ci­a­tion (CTA) and the Na­tional Re­tail Fed­er­a­tion (NRF).

What’s more, prices of all TVs would rise by 4% as re­tail­ers spread their added costs to other mod­els, the study says.

“These pro­posed tar­iffs are bad for busi­nesses, Amer­i­can con­sumers and the econ­omy,” says Gary Shapiro, CEO of the CTA.

“China’s un­fair trade prac­tices must be ad­dressed, but as this study shows, tar­iffs aren’t the an­swer and will pun­ish U.S. con­sumers in the form of higher prices,” NRF CEO Matthew Shay says.

In re­sponse to the tar­iffs the ad­min­is­tra­tion has threat­ened to slap on $50 bil­lion in Chi­nese im­ports, China has said it would place 25% du­ties on $50 bil­lion in U.S. ship­ments to the coun­try. The two coun­tries have agreed to ne­go­ti­ate on is­sues such as the $370 bil­lion U.S. trade deficit with China to try to stave off the penal­ties.

About 47% of all TVs sold in the U.S. are im­ported from China, as are 83% of PC mon­i­tors and 34% of lithium bat­ter­ies, ac­cord­ing to the CTA. Those prod­ucts and printer ink and car­tridges rep­re­sent just a small por­tion of the 1,300 tech-re­lated im­ports from China the Trump ad­min­is­tra­tion has tar­geted with tar­iffs.

Whole­salers and re­tail­ers would pass along to shop­pers al­most all of the 25% duty Trump has threat­ened be­cause the in­ex­pen­sive prod­ucts made in China have low profit mar­gins, Trade Part­ner­ship Pres­i­dent Laura Baugh­man says. Also, she says, man­u­fac­tur­ers would not be able to shift pro­duc­tion to low-cost coun­tries such as Viet­nam and Thai­land in the short term be­cause those na­tions don’t have enough ca­pac­ity.

“You re­ally can’t get the TVs from some­where else,” Baugh­man says.

The price of a $250 TV made in China would rise 23% to $308 af­ter the tar­iffs, ac­cord­ing to the CTA and NRF. Also, TV prices broadly would in­crease 4.1% as re­tail­ers off­set some of their added costs by rais­ing prices of other mod­els, Baugh­man says. In to­tal, shop­pers would pay an ad­di­tional $711 mil­lion a year for TVs and cut back their to­tal pur­chases by 7.8%, the study says.

There would be sim­i­lar ef­fects for other prod­ucts, the study says:

Mon­i­tors: Prices of PC mon­i­tors from China would in­crease 23.5%, and mon­i­tor prices over­all would rise 2.8%.

Bat­ter­ies: Bat­tery prices would in­crease 23.8% and bat­tery prices broadly would edge up 0.8%.

Printer sup­plies: Printer ink and car­tridge prices would jump 22.7% and over­all prod­uct prices would rise 4.1%.

Daniel Ives, chief strat­egy of­fi­cer and head of tech­nol­ogy re­search at GBH In­sights, says some re­tail prices on Chi­nese tech­nol­ogy im­ports may rise 23%, but oth­ers could in­crease 5% to 10% as whole­salers and re­tail­ers ab­sorb much of the added cost.

JOE RAEDLE/GETTY IM­AGES

Pres­i­dent Trump has pro­posed a 25% tar­iff on $50 bil­lion worth of Chi­nese goods.

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