Dell, HP, Intel and Microsoft unite to oppose US tariff hikes
The tech giants argue that proposed tariff rise would stifle innovation and growth
Tech giants Dell, HP, Intel and Microsoft have joined forces to oppose the US government's proposal to include laptops and devices among Chinese goods subject to tariffs.
In a joint statement, the tech giants opposed the charges, citing that it would "disproportionately harm" US consumers and businesses, as well as failing to address Chinese trade practices.
"…[T]he imposition of tariffs on such products would not address the underlying Chinese trade practices that US Trade Representative's (USTR) investigation seeks to remedy," read the statement.
"Instead, the tariffs will harm US technology leaders, hindering their ability to innovate and compete in a global marketplace."
Last year, President Trump announced that certain goods imported into the US from China would be subject to tariffs of 10 per cent, which caused a number of vendors to bump up their prices.
Trump then announced a further increase of 25 per cent on goods imported from China, as well as threatening to expand the breadth of products that could be hit with the increased tariffs, including PCs, laptops and smartphones.
The move has caused an uproar among US organisations, with 600 businesses, including behemoths such as Target and Walmart, sending a letter to Trump asking him to reconsider the hikes.
Now the tech giants have entered the fray with their letter claiming that HP, Dell and Microsoft are collectively responsible for 52 per cent of the notebooks and tablets sold in the US.
By including them among the products to be taxed, they argued, it would "substantially" increase the cost of devices in the US for consumers and SMBs, which would have a knock-on effect to the economy.
Implementing the tariffs would raise the US price for laptops, PCs and tablets at least 19 per cent, the companies claimed.
They also argued that the fees would affect the US's lead in the global marketplace and that moving production out of China is not feasible in the short-term due to the disruption it would cause in the supply chain.
"The proposed tariffs will add to the growing tariff burden on our companies and hinder our ability to innovate and maintain US technology leadership… this result is inconsistent with USTR's stated intent to avoid tariff increases that cause disproportionate harm to US interests, including consumers and small and medium-sized businesses," the statement said.
"US-based laptop manufacturers use specialised, custom production equipment that currently exists only in China.
"Moving production outside of China would take considerable time and come at a significant expense. Any modification in the supply chain would necessarily divert resources away from investments in innovation - innovation that is driven by R&D teams throughout the United States."
Critically, the tech companies saw the proposed move as giving non-US competitors - including Lenonvo, Acer and Asus - an advantage, as they have less presence in the US, and therefore are not as dependent on that market.
"Tariffs would provide a windfall to manufacturers based outside the US," the statement read.
"Although all leading laptop makers manufacture nearly all of their laptops in China, foreign competitors have significantly lower exposure to the US market.
"Because our foreign competitors are less dependent on US sales, they would be less severely impacted by new tariffs and would be well-positioned to continue investing in R&D during a time when our companies will be forced to reduce R&D expenditures to offset the increased tariff burden."
The USTR began a public hearing on Monday to decide which products, if any, will be hit with further charges. The hearing will end on 25 June, with any tariffs coming into effect on 2 July.