Tech Companies Making Final Efforts to Avoid Tariffs

Four major U.S. tech companies sent a letter at the last minute to the Office of the United States Trade Representative requesting exemption from a possible round of new tariffs on $200 billion of imports from China.

The four companies Hewlett Packard Enterprise, Juniper Networks, Cisco and Dell are concerned that the new tariffs would increase the costs of the networking equipment they have and damage the bottom lines of the companies and leading to possible job losses in the U.S.

The four have said the price increases would impact in a negative way internet service providers, data centers, small businesses and customers. The tariffs would also be a hindrance to innovations that are important to the government, such as the rolling out of the new 5G networks and cloud computing, according to the content of the letter.

If the USTR imposes an additional duty of between 10% and 25% on products for networking and accessories, it would create broad and disproportionate harm economically to interests of the U.S., including the four companies and workers in the U.S., the customers, the consumer, and broader economic and strategic U.S. priorities, said the content of the letter to Robert Lighthizer the U.S. Trade Rep.

The U.S. could slap tariffs on over $200 billion of goods from China as quickly as Friday when the period of public comment on the new tariffs ends.

It is not clear is the new tariffs would be $10% or 25%, but if imposed they would cover close to half of all goods from China entering the U.S.

The White House administration placed 25% tariffs on over $34 billion of imports from China in July and $16 billion more in August, saying that Beijing needs to correct its unfair trade practices.

However, China, the largest trading partner of the U.S., accused the White House of trade bullying. China then responded by equaling the measure on goods from the U.S.

The four tech giants that wrote the letter manufacture products that support much of the internet. They produce servers, hard drives, and different networking equipment.

The products they make are used by other technology companies, the U.S. government and things from hospitals to schools.

The letter indicated that the new duties would impact more than $23 billion imports and create the potential liability in duty for consumers in the U.S. of between $2.3 billion and $5.7 billion at duty rates of 10% and 25%.