The trade conflict launched by American president Trump took a turn again this week as the electronics sector endured fresh bombardments. First granted the relief of being exempt from the tariffs, Trump’s clarification that these items are not free, only subject to a new vacuum specialized levy, created disorder within the industry.
European bourses were treated to a momentary lift on Monday due to the news that some electronic goods would not attract the draconian 125% tariff from China. The euphoria was short-lived, however, as the markets have calmed down dramatically on the back of subsequent comments.
The Semiconductor Tariff: A Unique Form of Taxation
On social media, Trump clarified his position, claiming that reports saying exemptions would be provided were inaccurate. Instead, he declared the soon-to-be-announced imposition of a distinct ‘semiconductor tariff’ within the scope of ‘National Security Tariff Investigations’ targeting semiconductors and the entire supply chain of electronics. He kept the industry on hold by promising to provide more information regarding the new tax on stove sides of the semiconductors.
Electronics at Hazard: An Important Industry Under Watch
As smartphones, laptops, and other day-to-day routines, devices that work on semiconductors greatly depend on as electronics, the matters at hand do pose an even larger potential risk to the electronics industry as a whole. Increased tariffs were anticipated to pose major problems for both consumers and manufacturers.
Sony’s Reaction: Increased Pricing in Europe
The effects have already begun to be felt as products are dominated by exchange. On Monday, Sony reported they would increase the pricing of their PlayStation 5 game console by nearly 10% across Europe, Australia, and New Zealand, citing ‘a challenging economic environment,’ inflation, and unpredictable exchange rates. Remarkably, the US counterparts have not been offered similar announcements.
China’s Assessment: “A Minor Progression” Of Focused Tension
The initial U.S. exemptions were noted to be a “small step” by the Chinese commerce ministry hearing China’s ‘good faith’ purchases. However, China noted that they were still ‘evaluating the impact’ of Trump’s trade policies as a whole.
The Ongoing Conflict: Stalled Thawing Progress
The proposed plans of tariffs on semiconductors by the Trump administration have effectively cemented trade relations between China and the U.S. as stagnant. While speaking with CBS on ‘Face the Nation’, U.S. Trade Representative Jamieson Greer noted that no plans to meet were made under President Xi and Trump.
