Modern industry has already formed a transnational industrial chain with a highly-divisional division of labor. Any problem in this chain of the industry chain may be triggered by the whole body. The so-called 'China tariff list for China' has already taken effect. The part involved 818 kinds of products worth about 34 billion US dollars. Although this figure is not very large compared with the huge trade volume and economic aggregate between China and the United States, in the United States, the industries actually affected by the increase of tariffs far exceed This list.
Reporter: 'The balls made in China look ordinary, but the precision has reached 200 nanometers. The balls are used in ball bearings. The ball bearings are widely used in various machines, such as vacuum cleaners, whether it is this ball or this. Ball bearings are all based on the so-called 'China tariff list 301' in the United States.'
American Precision Parts Co., Ltd. is a distributor of precision bearing parts. On July 6, the United States launched a tariff of 301 on China. The company imported bearings from China at sea. This shipment will be subject to a 25% tariff, but the company President Huo said that he is not really worried.
David Huo, President of Precision Accessories, USA: 'If possible, customers will find alternative parts sources, but many varieties take a lot of time because they are used for parts with high safety requirements, some for some cars. Accessories, need a cycle to test before applying. Generally speaking, it may take four years to replace the supplier.
The increase in tariffs affects the downstream of the industrial chain
Huo David said that as a dealer, in the short term, the business volume of precision parts companies will not be greatly affected. For his customers, there is basically no choice but to continue to use Chinese accessories, if you do not want to stop work, only The tariff can be handed over first, and at the same time, the US government is required to apply for tariff exemption. The rising cost of tariffs will continue to be transmitted down the industry chain. Although the bearings are small, the impact will be very large.
David Huo, President of Precision Accessories, USA: 'Power tools, agricultural equipment, mining equipment, various consumer products, from cars to dishwashers, even computer hard drives have one or two bearings as long as they move.'
The current US tariffs on China are mainly industrial products. Bearings are only one of them. Although consumers do not buy them directly, the number of products affected may be ten times that of the products on the list, and there are more than one hundred times. Even Many high-tech companies in Silicon Valley in the United States can't sit still.
Mourinho, vice president of technology and innovation at Silicon Valley Leadership Organization: 'Tariffs can't solve any problems, it will only make the business here in Silicon Valley harder to do, just like what I said before, affecting the global industry chain and affecting the price of entering American accessories. '
Affected enterprises: Price increase will be the only option
For some multinational companies, the most direct and simple way to deal with the increase in tariffs on US imports is to put the finished products that are intended to be produced in the United States into other countries for production, which will reduce employment in the United States; 4. The list of tariffs, whether it is a multinational company or a small and medium-sized enterprise, will increase their price.
David Huo, President of Precision Accessories, USA: 'Price increases are the only option. To produce the same bearings in China as in China, the added cost is far more than 25%.'
In January 2018, the US government announced that it would impose a 20% tariff on imported washing machines to protect domestic industries. According to the US Department of Labor, in the first quarter of this year, the prices of washing machines including US domestic brands jumped collectively. %. The current large-scale tariff increase measures in the United States are basically in effect in June and July. Although there is a certain lag effect, the impact on consumers is coming.
Reporter: 'The US tariff list on China deliberately removed the terminal consumer products such as TV, but only one bearing, almost all of them exist in the household products around me. The cost of the addition will inevitably be reflected in these daily necessities. On, and the final payment will only be American consumers.'
