China Can Hit U.S. Tech Firms Where It Hurts in Tariff Response




 

President Donald Trump's latest move to ratchet up tariffs on Chinese goods raises the specter that China could strike back by tripping up U.S. companies doing business in the Asian nation -- and tech is especially vulnerable.

On Tuesday, the U.S. said it will impose a 10 percent tariff on $200 billion of Chinese-made products, from food to electronics by Aug. 30. That adds to an already-announced $50 billion in tariffs that could raise prices on almost half of everything the U.S. buys from China. President Xi Jinping has vowed to strike back.

China's imports from the U.S. aren't large enough to match Trump's tariffs dollar for dollar, but the country has other levers it could use, such as imposing new taxes and added regulation on U.S. companies that already operate in China, or encouraging citizens to boycott American products. Combining U.S. corporate revenue in China with exports to the country actually gives the U.S. a surplus of $20 billion, according to Deutsche Bank AG.

U.S.-based companies that derive the highest proportion of their revenue in China are dominated by semiconductor makers and other electronics manufacturers, according to data compiled by Bloomberg. Monolithic Power Systems Inc., a San Jose, California-based component maker, tops the list with about 60 percent of its sales coming from China. Apple Inc., Nvidia Corp. and Broadcom Inc. all generate more than 20 percent of their sales in the country.

China has used non-tariff tactics in the past. South Korean and Japanese companies have been targeted during times of political tension with increased regulation, harsh new consumer safety rules and mass boycotts inspired by China's state-run media. Apple only recently staged a comeback in China, one of the company's most important markets. Tesla Inc. just announced plans to build a Chinese assembly plant but still needs to secure approvals and permits.

The government could also block mergers and acquisitions between U.S. and Chinese companies. On Tuesday, The Wall Street Journal, citing unnamed Chinese officials, reported that China is considering delaying merger approvals. NXP Semiconductors NV, which is waiting for Chinese approval for its acquisition by Qualcomm Inc., fell as much as 4.7 percent, the most since May 17. Qualcomm fell 1.8 percent.

Read China Can Hit U.S. Tech Firms Where It Hurts in Tariff Response on bloomberg.com

COMMENTS

More Related News

Stocks struggle as earnings hopes compete with China growth fears
Stocks struggle as earnings hopes compete with China growth fears

Data showing China's economy and factory production growth had slowed sent Asian markets lower at the start of the week, as investors fret an escalating trade battle between China and the United States may soon start to damage the real economy . Merger speculation concerning industrials helped outweigh

Chinese
Chinese 'highway to nowhere' haunts Montenegro
  • World
  • 2018-07-16 09:54:06Z

By Noah Barkin and Aleksandar Vasovic PODGORICA (Reuters) - Perched atop massive cement pillars that tower above Montenegro's picturesque Moraca river canyon, scores of Chinese workers are building a state-of-the-art highway through some of the roughest terrain in southern Europe. The government

Stocks rise as earning expectations beat China growth fears
Stocks rise as earning expectations beat China growth fears

Data showing China's economy and factory production growth had slowed hurt Asian markets at the start of the week, as investors fret an escalating trade battle between China and the United States may soon start to hurt the real economy. Both rely on solid Chinese growth, but merger speculation concerning

EU
EU's Tusk calls on China, U.S., Russia not to start trade wars
  • World
  • 2018-07-16 03:50:31Z

BEIJING (Reuters) - European Council President Donald Tusk said on Monday China, the United States and Russia had a duty not to start trade wars and called on the three countries to reform the World Trade Organization. He said there was still time to prevent conflict and chaos. Tusk and European Commission

How AMD
How AMD's Chinese "Clone Army" Could Hurt Intel

AMD is sneaking up on Intel with licensed server chips in China.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.