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President Donald Trump recently announced that he would seek tariffs on $200 billion of Chinese goods, following up on a 2016 campaign promise to use tariffs in order to cut U.S. trade deficits. The White House has stated that the tariffs, which will initially target over 800 kinds of products worth $34 billion in imports, are retaliation for what it claims were years of unfair trade practices by the Chinese government.

China has countered with a similar tax to over 600 U.S. products worth $50 billion. Back in April, China announced tariffs on U.S. imports ranging from 15 to 25 percent. Both countries decided to put the tariff plans on hold in May in order to conduct talks, but that diplomacy has failed. In total, the Trump administration has threatened to place tariffs on up to $450 billion worth of goods.

Reactions in the U.S. are mixed. Some of the president’s supporters are cheering him on for his tough stance against China, and feel that these policies will benefit American businesses that have suffered under China’s policies. Others are worried that these actions will escalate into a trade war, hurt American farmers (soybeans and pork are particularly at risk, say experts), and pose a serious threat to free trade.

Electronics are among the biggest products that the U.S. imports from China. Some experts have said that the Trump administration will be targeting high-tech goods, such as electronics and appliances, as opposed to retailers and consumer goods. The Consumer Technology Association released a statement saying, in part, “Imposing tariffs on Chinese goods could cost Americans hundreds of thousands of jobs. The tariff on $50 billion in goods being imposed today is no exception. And the anticipated retaliation by China will escalate the U.S.-China trade war and reduce U.S. gross domestic product by nearly $3 billion, based on a CTA and National Retail Federation (NRF) study on the initial White House tariff proposal.” 

American companies such as Intel and Qualcomm typically send their nearly completed chips to China for assembly, testing, and packaging, which means that they could be slapped with tariffs when the chips are shipped back into the U.S. The Semiconductor Industry Association, which represents major U.S. chipmakers, weighed in on the Trump administration’s tariff plans in a June 15 statement: “While the U.S. semiconductor industry shares the Trump Administration’s concerns about China’s forced technology transfer and intellectual property (IP) practices, the proposed imposition of tariffs on semiconductors from China, most of which are actually researched, designed, and manufactured in the U.S., is counterproductive and fails to address the serious IP and industrial policy issues in China. We look forward to working with the Administration to explain why imposing tariffs on our products would be harmful to our competitiveness and does not address our challenges with China.”

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