2018年CRI U.S. tariffs increases costs for its own enterprises: observers

Observers in the United States are warning that additional tariffs 1 imposed by the U.S. on Chinese products could put its own companies at risk.

US tariffs on 34 billion U.S. dollars' worth of Chinese imports took effect last Friday, targeting products from sectors 3 such as aerospace 4, auto 5 parts and medical equipment.

Chinese authorities immediately brought in retaliatory 6 tariffs on US products amounting to 34 billion US dollars as well.

Ralph Ives, the executive vice-President of Global Strategy and Analysis with the Advanced Medical Technology Association based in the United States, says the tariffs are likely to result in a lot of pain at home.

"Importing the components 7 is going to be a cost pressure, and there's going to be pressures in terms of our (American) manufacturers because their costs are going to increase and they're not going to be reimbursed 8 for those additional costs," says Ives.

Mary Lovely, researcher at the Washington-DC-based Peterson Institute for International Economics, says her research is suggesting multinationals 9 are more likely to pay the price.

"Instead we find that it is American, European, and Japanese multinationals that are operating in China and selling back to the United States (the goods) that the tariffs are placed on. (Those) goods are then further processed into goods that are sold inside the American market or exported by American-based companies," says Lovely.

Chad Bown, another senior researcher with Peterson Institute for International Economics, says products from multinationals operating in China actually account for a greater proportion of Chinese imports, especially in sectors such as computer and electronic products.

"87% of the U.S. imports are not coming in from Chinese companies. They are coming in from American, Japanese, (South) Korean, European, lots of multinationals, but they're not Chinese. So that's why it's strange to input 10 taxes. The U.S. tariffs are hitting mostly non-Chinese firms, the subsidiaries of American companies and companies of allies," says Bown.

In the wake of the new tariffs, US companies affected 11 by additional charges now face the option of either paying more to export their products to China or try to redirect their inventories 12 to other countries.

However, Ralph Ives with the Advanced Medical Technology Association notes that changing to another country could end up costing US companies more in the long-run.

"It's not as easy as just saying 'Oh, I was getting this product from China, I think tomorrow I'll go to Malaysia.' It's because, for two reasons, one is that they have to find that supplier and they have to make sure that is a reliable supplier, and then they have to go to the U.S. FDA (Food and Drug Administration) and make sure that the product is consistent with the product that they have approval on the U.S. market. And those all take time, particularly for smaller manufacturers," says Ives.

Ives notes negotiations 13 are underway between the US medical equipment sector 2 and Chinese authorities to determine whether companies involved in the medical industry might be exempt 14 from the current trade fight.