Friday, May 24th 2024
Biden Administration to Revive Trump-Era Tariffs on China-made GPUs and Motherboards
The US Trade Representative (USTR) under Biden administration is preparing to reinstate tariffs on certain technology products imported from China, including GPUs and motherboards. The 25% duties, initially imposed by the Trump administration in 2019 but later suspended, are being revived as part of broader efforts to address concerns over China's economic and trade practices. The tariffs are intended to protect American companies from what the administration describes as unfair Chinese trade actions like intellectual property theft and forced technology transfers that undermine U.S. competitiveness. While no specific effective date was provided, the reinstated tariffs are expected to impact major Chinese computing component suppliers significantly. The revival of the Trump-era tariffs marks a reversal from the previous administration's move to temporarily suspend the duties in 2020 as a goodwill gesture during broader trade negotiations with Beijing.
However, those talks ultimately stalled amid the COVID-19 pandemic and rising bilateral tensions over economic and national security issues. Industry groups have expressed concerns that reviving the tariffs could disrupt tech supply chains, increase costs for U.S. companies and consumers, and potentially invite further Chinese retaliation. The tariffs would apply to GPUs, motherboards and other computing components assembled in China regardless of whether the raw components themselves originated from the country. With tensions already elevated over issues like Taiwan and advanced semiconductor production, the tariff announcement could set the stage for further economic friction between the world's two largest economies absent a negotiated resolution on tech trade.
Sources:
US Trade Representative, via Tom's Hardware
However, those talks ultimately stalled amid the COVID-19 pandemic and rising bilateral tensions over economic and national security issues. Industry groups have expressed concerns that reviving the tariffs could disrupt tech supply chains, increase costs for U.S. companies and consumers, and potentially invite further Chinese retaliation. The tariffs would apply to GPUs, motherboards and other computing components assembled in China regardless of whether the raw components themselves originated from the country. With tensions already elevated over issues like Taiwan and advanced semiconductor production, the tariff announcement could set the stage for further economic friction between the world's two largest economies absent a negotiated resolution on tech trade.
95 Comments on Biden Administration to Revive Trump-Era Tariffs on China-made GPUs and Motherboards
I still expect the comments here to degenerate into politics and possibly force the closure of the topic. This is a very heated political arena right now after all.
It may further hit home though, that despite the big superficial differences. It won't actually make much difference if it's Trump or Biden in the White House...
P.S. I am also in for deactivating comments for this news, It will turn into a political debate.
If China or US stops all the imports to US, who will replace them? Will USA start producing everything they imported? Will be Americans willing to accept the raised costs etc.
I just don't understand comments like yours, where you are so sure China is dependent on USA, but USA is not on China.
But us being in control of more manufacturing / factories is a good thing, even if it costs us more. Especially as we come up to geopolitical concerns regarding China.
I wish EU did the same, because I think EU is too reliant on US or China and I don't like It one bit.
If you are too reliant on anyone, that's never a good thing.
There are more than 2 options out there.
If companies raise prices again it would be nothing more than price gouging as those costs are already factored in.The US is a service based economy while China is a manufacturing based economy. The US accounts for a massive part of China's economy where as the reverse is not true. The point is that if China is going to be a bad actor in the world, it's going to be punished for it.They did accelerate company plans to move out of China. We are seeing massive investment in Vietnam and Mexico based production. As usual people are looking at policy as if it has an immediate impact. No, almost all policy takes time to have an impact and that impact often has a long tail.Any number of countries can replace China as a manufacturer. It just requires investment to develop the infrastructure and skills in the specific locality. Something that the rise is Chinese labor costs and tariffs further incentivize.Not at home per say, that's what the CHIPs act is for. Tariffs will just encourage production anywhere but China.
It wouldn't necessarily cost more either. Upfront investment costs are obviously a factor in new manufacturing hubs but beyond that labor in other 3rd world countries is significantly cheaper than China. China hasn't been cheap in a long time as labor costs continue to increase there.The primary driver of companies actually moving production out of China was the pandemic where China's policies made business difficult to impossible. The tariffs are just further motivation. We are past the initial hump needed to get the ball rolling and I expect manufacturing jobs to continue to move out of China. China needs to transition to a services based economy. This doesn't mean they get rid of manufacturing, it means their economy has a greater capacity to consume it's own products. Think of it as an additional layer to the economy. Just as an example, the services sector produces 98% of the jobs in the UK and yet their manufacturing input has been increasing year over year. It's a well known economic model that successful countries transition from agriculture then manufacturing then services in that order.All countries apply some sort of surcharge on foreign products to protect domestic markets. China for example applied a 50% tariff on western cars for a long time in order to grow it's domestic car market. That figure today is much lower but in general other countries tend to accept higher export costs to developing countries because otherwise their domestic industries would be overrun.
I'm in favour of nationalist manufacturing policies to protect homegrown industry, assuming it is beneficial to the nation. Unfortunately, modern capitalism isn't about what's good for the nation, rather what's best for investors (which also include pension investments.)
It's never as black and white as the triggered zealots try to make you believe.
Another reason is the amount of products made. It will take ages, in order to achieve at least some portion of the capacities the current factories have. Even with 100% correct and corrupt-free funding and managment, with least bureaucracy delays and hurdles.
The whole situation is complete falsehood. This is simple gouging. Everybody knows, that US won't start to make all improrted stuff overnight, in-house. Not because it will get pricey. The companies already ask enormous prices, like this has been made in-house, and the workforce salaries are only the tity tiny bit of that. The true reason is:
1 The tax money will never reach the destination, e.g. the production capacities it supposed to fund, due to obvious reasons.
2 Another is (no offense but...) because the US has not enough personnel, capable of making e.g. complex electronics. And if there is, not many qualified staff, would go work in factories for lower wages.
3 And most importantly, the companies themselves won't allow this, because they will become liable, and would have to report about every step of the production and profits. Or will have to "import" "cheaper" workforce, in order to keep the margins they want. And this is entire point, why they decided to move the production overeas in the first place. They can have any margins, and yet are not accountable for anything.
The worst thing is that, since the US is the primary market for many companies, especially the CPU/GPU makers being of US origin, it will affect the prices in other countries as well. Doesn't matter, will the companies rise MSRP, in order to include higher import taxes or not. The sellers all across the globe take the US prices as an example, as base threshold, and add their margins on top of that. This is sad, but it's how this works.Unfortunately, this will impact China way less than the US itself. It would be tough, but they will find new markets, e.g. EU, considering the recent increased "friendship" between them.