Tariffs Aren’t Costing U.S. Tech Companies $1 Billion Per Month

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The cost of tariffs on imported technology products is far lower than many in Silicon Valley feared.

U.S. companies paid $1.3 billion in tariffs on tech products purchased from China in October, according to a Bloomberg News report based on data provided by the Consumer Technology Association and analyzed by anti-tariff consulting firm The Trade Partnership. That’s about $1 billion more they were paying before the Trump administration imposed a 10% tariffs on $200 billion of Chinese imports.

At the same time, however, the price of these imports have fallen. Imported technology computer products that go into technology products assembled in the U.S. have declined by 1.6 percent compared to a year ago, according to data from the Department of Labor. Imported tech from China is 3.2 percent cheaper than it was a year ago.

In October, imports used in computer manufacturing amounted to over $40 billion. That represents a savings of about $640 million over what they would have paid for those products a year earlier–more than half of the additional tariff payments. Nearly $400 million of that discount came from the fall of prices in China, data from the Census Bureau show.

And there’s good reason to believe that Trump’s trade policies are one of the reasons the price of these imports has declined. A year ago, before the tariffs on China were announced, the prices imports used for computers and electronics manufacturing were declining by around o.8 percent, half of the current rate a deflation for these imports. And price deflation for these products is still accelerating.

This means, of course, that a big part of the tariffs are actually being paid by foreign manufacturers who now receive fewer dollars for their goods. People who think they have a better understanding of trade than the president like to mock Trump for saying that China and others pay tariffs but evidence suggests Trump has it right.

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