President Trump's trade war with China is taking a hefty financial toll on the US tech industry, a trade group warns. In May 2019 alone, tariffs on imported Chinese products cost the industry $1.3 billion -- that's six times higher than May 2018, despite a 31 percent decline in imports, according to the Consumer Technology Association.
Tariffs paid by the tech industry are expected to climb even higher in the coming months, the CTA warns, since a new 25 percent tariff increase took effect on May 11.
In 2017, just months after President Trump took office, his administration launched a probe into China's policies concerning intellectual property, technology, and innovation. That led to three rounds of tariff increases on a total of $250 billion worth of Chinese products. China, meanwhile, has increased tariffs on $110 billion worth of US products. The administration has threatened to increase tariffs on nearly all remaining imports from China.
"Although the Trump administration has paused on enacting further tariffs, US workers, families and businesses are still paying billions of dollars more than they otherwise would – again proving that tariffs are nothing more than taxes," CTA president Gary Shapiro said in a statement. "And the economic pain for everyday Americans and our companies will only grow, since tariffs have more than doubled on the largest list of products. While we support President Trump's effort to stop China's forced technology transfers and IP theft, this unpredictable trade policy forces American companies to absorb rising costs."
On top of that, Shapiro said, the trade war is hurting US chipmakers and prompting China's innovation sector to become more self-reliant.
The CTA also stressed the specific toll the tariffs are having on the United States' 5G rollout. The US tech sector has paid $930 million in tariffs on 5G-related products such as routers, gateways and servers, the trade group says.