Tariff Talk Looms Large Over Consumer Electronics Companies in Asia
SHANGHAI -- The Trump administration's threat to impose 25 percent tariffs on $50 million worth of Chinese imports and China's possible retaliatory actions were top of mind for Consumer Technology Association President Gary Shapiro during his opening remarks June 13 at the electronics expo CES Asia. “The challenge with tariffs is that nobody wins, and these threats and the discussion about it causes global economic uncertainty,” Shapiro said.
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“When elephants fight, the ground gets trampled,” Shapiro said, again paraphrasing the African proverb he has used for months to describe the perils of a U.S. trade war with China. “Everybody loses when two major trading partners start disagreeing.” The White House announced May 29 that the U.S. Trade Representative's office would release its final tariffs list by June 15 and that the tariffs would take effect “shortly thereafter” (see 1805290010).
Shapiro expanded on the comments in a media briefing, saying CTA has always taken the position that tariffs aren’t good. “We’ve always believed in free trade,” he said, saying he worked hard to lobby on normalizing trade relations with China, on NAFTA and the Trans-Pacific Partnership. CTA believes free trade is “basic economics.”
The association disagrees with the administration’s position on tariffs, which Shapiro called “a different approach on tariffs than any in my professional life.” He believes Congress would be in opposition, too, “if they took a vote on it,” he said. CTA’s position just doesn't concern wanting to see consumer tech products sold at “a reasonable price,” but “we have farmers throughout the United States, and people that export machinery” that would be hard hit, Shapiro said. “There’s a high degree of concern in the business community.”
Making it a point not to criticize President Donald Trump, “especially outside of U.S. soil,” Shapiro said the issue of tariffs is "potentially very dangerous, especially if you go to the next step, which is a trade war.” It's "not a good thing" that Canada, Mexico and China are talking about retaliating for U.S. tariffs on imported steel and aluminum, he said. "The only economist who thinks it’s a good thing is the one who happens to be in the White House.” On trying to influence the administration on tariffs, Shapiro said: “Frankly, [that’s] not something that those of us who’ve been around for awhile are used to understanding or figuring out how to do.”
Shapiro acknowledged that some CEOs from other countries “seem less concerned than I am” about tariffs. It's his job as CTA's chief "to be concerned,” Shapiro said, adding that he doesn’t want to “panic about it.” Any decline "in the stock market of at least two percent since President Trump has been in office has been related to the issue of tariffs,” he said. He expressed hope that current tariff fears might prove to be unfounded. A year ago, there were major concerns about the threat of a U.S. nuclear war with North Korea, but “it doesn’t seem like we’re concerned about that today,” he said.
On which categories are most vulnerable to possible tariffs, Shapiro cited TVs and vehicles and said many industries have concerns about disruptions to the supply chain. “The entire supply chain for many products, including automobiles and TV sets," is built around free trade, he said. Shapiro conceded that he "doesn't know" if prognosticators are right when they describe all the tariff talk as overblown. "I hope we move forward in a more predictable fashion, because that’s how the world economy grows,” he said.