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President Donald Trump's latest move to raise tariffs on Chinese goods suggests that China could retaliate by tripping US companies doing business in the Asian nation – and technology is particularly vulnerable. it will impose a 10 percent tariff on 200 billion dollars of Chinese goods, food to electronics, by 30 August. This is in addition to the $ 50 billion already announced that could increase prices in almost half of the United States. buys from China. President Xi Jinping promised to retaliate
Chinese imports from the United States are not large enough to match Trump's tariffs, but the country has other levers that it could use, such as the imposition of new business taxes, slowing down approvals, or encouraging citizens to boycott American products. Qualcomm, the San Diego-based smart card giant, is still waiting for China's final approval for its acquisition of NXP Semiconductors worth more than $ 40 billion.
$ 20 billion, according to Deutsche Bank. According to data compiled by Bloomberg, US-based companies that hold the highest proportion of sales in China are dominated by chip makers and other electronics manufacturers. Monolithic Power Systems, a San Jose, California-based component manufacturer, tops the list with about 60 percent of its revenue from China.
China has used non-tariff tactics in the past. South Korean and Japanese companies have been targeted during periods of political tension with increased regulation, new stringent consumer security rules and mbad boycotts inspired by Chinese media.
Apple recently returned to China. important markets. Tesla has just announced plans to build an badembly plant in China, but it still needs approvals and permits.
China plans to delay merger approvals, the Wall Street Journal Tuesday quoted unidentified Chinese officials as saying. NXP fell 4.7 percent, the most since June 25. Qualcomm fell 1.6 percent.
This agreement is one of the most important hostages of the trade war between the United States and China. Qualcomm has promised investors that the deal would be completed by the end of 2017. NXP has given Qualcomm until July 25 to close the deal or their deal will expire.
Qualcomm has already won the authorization during the investigation phase of China's approval process. with the case told Bloomberg earlier this year. The final announcement, however, could be delayed in the context of a high-level debate on more general trade issues and on the fate of China's ZTE telecommunications equipment company.
The complexity of politically infused cross-border approvals is relatively minimal in the global electronics supply chain, which links China and the United States and creates domestic tensions for both countries. An Intel processor manufactured in Oregon or Arizona often travels to Chengdu, where it is packed for final installation in a computer. This computer can then be badembled for a US company such as HP by a Chinese subcontractor and shipped to the United States for sale. It is not clear which parts of this process would be affected by US-Chinese tariffs.
China could make it harder to obtain operating licenses or building permits, said Ivan Feinseth, chief investment officer at Tigress Financial Partners. "There are just a lot of little things that they could do that would just be boring," he said. But since US business in China is often done through partnerships with the government, China risks injuring itself if it retaliates against US companies, he added.
Infographic: Anatomy of an iPhone parts come from
Apple is the master of the global supply chains of electronics. While the company is based in the United States, China has probably become its largest market. The vast majority of Apple products are made in China and the company has generated just over 20% of its revenue during its most recent quarter.
Since the launch of more efficient iPhones in China China Mobile and others, Apple has thrived there. The company has increasingly configured some of its hardware and software for the region – at a level beyond customization for other markets. He also launched a gold iPhone to appeal to Chinese consumers, added mobile payment support for some transit systems across the country, and developed messaging features that mimic the popular features of local services like WeChat.
agreeing to transfer data storage for its iCloud services to state-affiliated servers in China. Tim Cook, the general manager of Apple, also travels regularly to China for public and private events.
It is unlikely that Trump's tariffs will immediately affect Apple, because of its US headquarters. But China's retaliatory tariffs could target consumer electronics badembled in the country, raising the already high prices of the latest iPhones, iPads and Apple Watches
Tom Forte, DA Davidson badyst, said that US technology companies manufacturing in China could be more isolated. of retaliation, citing Apple and its partnership with Foxconn Technology Group, which badembles iPhones in factories across China.
"The Chinese government would not want to do anything to damage Chinese subcontractors," said Forte. the electronics generates "a lot of employment growth" in the country.
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