Most recently, the exemption of custom duties on smartphones and computers by former US President Donald Trump may strengthen the existing US trade and global economy. Let us take this up in detail.
The Trump administration ramped up tariffs on a number of products from China beginning in 2018. The program was aimed essentially at encouraging manufacturing back to the US and improving the trade imbalance with China. However, a downside to these tariffs is that they cost the American consumer and industry more for these precious goods.
The tariff exemption for these technological products is imperative since they are now considered necessities by the bulk of US citizens. The COVID-19 pandemic saw an increase in demand for these devices when most people were working from home. At a time when people rely heavily on digital devices, the burden of tariffs would threaten to make these devices even more costly.
On the economic side, this exemption increases consumers' purchasing power. If tariffs were imposed on smartphones and computers, they would be yet more expensive, and the average person could not buy them, which would slow sales and possibly hurt innovation and development in the tech industry.
Besides, this exemption is also a positive for American businesses. Most American tech companies manufacture in China. So if they were paying tariffs on their products, their increased manufacturing costs would reduce competition for them in the US market.
Some analysts believe it weakens the protection for domestic manufacturers. Without tariffs imposed on items from China, Chinese manufacturers can take advantage of the situation to have a relative advantage against domestic companies. This will further affect manufacturing numbers in the US as companies follow cheaper foreign products.
The US government, however, has stated that this decision was in the interest of consumers and the economy. The government views this exceptional exemption as a way to offer technology at affordable prices to consumers, hence bettering their lifestyle.
In the future, it will be hence interesting to see what the fallout of this new US trade policy will be for the global market. Will trade relations bloom with other nations or wither? This remains the enigma as of today.
Last but certainly not the least, the exemption of smartphones and computers from Trump's tariffs may turn a new corner for the tech industry in the US. It will, therefore, be much to the relief of the US consumers and give a boost to the economic situation of the country.