Consumer Technology Association says trade war is costing American technology companies and buyers billions
New tariffs that went into effect Sept. 1 will add another $7 billion in cost to consumer and many commercial electronics before the end of the year, which is prompting the CTA to call on Congress to rein in President Donald Trump’s trade war with China.
The Lowdown: In a statement, CTA CEO Gary Shapiro says President Trump is correct to address the technology transfer requirements and IP theft by China. However, the escalating trade war is unnecessarily costing American consumers and technology companies tens of billions of dollars.
What’s worse, Shapiro says, is that American companies are spending an inordinate amount of time researching and adjusting to unpredictable trade conditions and devoting less time and effort to innovation and development. Shapiro says the Trump trade war is the “worst economic mistake since the Smoot-Hawley Act of 1930,” which many historians and economists attribute as a significant factor in causing the Great Depression.
The Details: Shapiro and the CTA – the leading consumer electronics and technology association – is calling upon Congress to pass the Reclaiming Congressional Trade Authority Act of 2019 to reassert Congress’ oversight and role in setting trade policies. Through the Trade Authority Act, Congress can act to protect American consumers from “unending trade wars and retaliatory tariffs,” Shapiro said.
Sen. Tim Kaine (D-Virginia) introduced The Reclaiming Congressional Trade Authority Act in March. The bill was referred to the appropriate committees for review, but none have taken action to advance the proposed legislation to restrict the president’s authority in trade policy. Legislative observers say the bill stands little chance of passing, as neither party wants to restrict executive authority that may handcuff future presidents.
The Impact: While the Reclaiming Congressional Trade Authority Act stands little chance of passage, the CTA’s statement is another sign of the technology industry’s growing apprehension and anxiety over the Sino-American trade war. The escalating tariffs are causing American technology and manufacturing companies to relocate their production out of China. The tariffs will add billions of dollars in costs to consumer and commercial technologies. Leading technology manufacturers say they’re managing the rising costs, but have to pass some of the added expense on to customers. The added costs will impact the margins of vendors and partners.
The Buzz: The following is the full statement of CTA CEO Shapiro:
“This new tariff list taxes consumers on $52 billion worth of their favorite tech products, including TVs, digital cameras, Bluetooth earbuds, smartwatches and fitness trackers. American consumers were already going to pay higher prices for their holiday gifts. Now, the president’s decision to hike tariffs even higher means even more pain for American businesses, workers and families.
The president absolutely should address China’s forced technology transfers and IP theft. But this unpredictable tariff policy is forcing us down the wrong economic path. Continuous threats of more tariffs and occasional promises that trade talks are progressing mean whiplash for global stock markets. That uncertainty hurts every American with a pension, retirement fund or college savings plan.
This approach also compromises our global leadership. U.S. companies have to spend more resources on constantly changing trade rules and less on innovation, new products and our economic health. These tariffs are the worst economic mistake since the Smoot-Hawley Tariff Act of 1930, a policy that launched America into the Great Depression. This is not how you reach a meaningful trade agreement.
The president does not have unilateral authority on trade. Congress should pass the Reclaiming Congressional Trade Authority Act of 2019, reasserting Congress’ role in trade policy and protecting Americans from unending trade wars and retaliatory tariffs.”