March 23, 2018 // 11 a.m.
US President Donald Trump has signed an executive memorandum enacting a range of tariffs on trade partner China in a move which could have a serious impact on the technology industry.
Signed into effect late yesterday following what the US government has described as '[an] investigation of China's laws, policies, practices, or actions related to technology transfer, intellectual property, and innovation,' the tariffs described in the presidential memorandum are claimed to be payback for the nation's pressure tactics in transferring technology outside the US, restricting US firms' abilities to licence Chinese technology, systematic investment in and acquisition of US companies with a view to large-scale technology transfer, and - most tellingly - that it 'conducts and supports unauthorised intrusions into, and theft from, the computer networks of U.S. companies [which] provide the Chinese government with unauthorized access to intellectual property, trade secrets, or confidential business information, including technical data, negotiating positions, and sensitive and proprietary internal business communications, and they also support China’s strategic development goals, including its science and technology advancement, military modernization, and economic development.'
The tariffs cover an estimated $60 billion of Chinese imports, including numerous products related to the technology sector - which, given the amount of material produced in China for consumption in the US, could be a major blow for technology companies around the world. China, meanwhile, has suggested that it could hit back with tariffs of its own, with the Chinese Ministry of Commerce stating that 'China will certainly take all necessary measures to resolutely defend its legitimate rights and interests,' though it prefers to 'sit down and talk calmly' first.
If a trade war erupts, the cost of various goods and services will rise - not just in the US, but globally. For some nations, however, it could prove an opportunity to get a foot in the door and take over importation and exportation of goods and materials which are now too expensive to source from China or the US.