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Trade War

US tech companies request last-minute China tariff exemptions

Cisco, Dell, HP and Juniper say additional duties disproportionately hurt US

Cisco, alongside Dell, HP and Juniper, wrote to U.S. Trade Representative Robert Lighthizer seeking tariff exemptions.   © Reuters

NEW YORK -- A group of American technology companies on Thursday sought specific protections from the Trump administration's $200 billion list of proposed tariffs ahead of signs that the next salvo in the Sino-American trade war is imminent.

Writing to U.S. Trade Representative Robert Lighthizer, Cisco Systems, Dell Technologies, Hewlett Packard Enterprise and Juniper Networks requested the removal of multiple items covering networking-related accessories and networking products, calling the latter a "critical segment" of their businesses.

"If USTR were to impose a 10-25% additional duty on networking products and accessories, it would cause broad, disproportionate economic harm to U.S. interests, including our companies and U.S. workers, our customers, U.S. consumers, and broader U.S. economic and strategic priorities," the letter said.

The letter also warned that the tariffs could slow down "the development and rollout of 5G mobile wireless technology and cloud computing." 

"In addition to leaving us with less capital to invest in research and development, over time the reduced profits that the duties could cause could lead to hiring freezes, stagnant wages, and even job losses, as well as harm to investors such as reduced dividends and erosion of shareholder value," the companies wrote.

A core justification for U.S. President Donald Trump's aggressive trade strategy is the creation of job opportunities for American workers.

The companies further warned that price increases resulting from the additional duties could result in American companies like themselves "losing market share to foreign competitors in third-country markets."

The additional tariffs on $200 billion worth of Chinese goods could be announced as early as Friday, the day after the conclusion of a public comment period for businesses and others to weigh in.

Trade negotiations between Washington and Beijing have come to a standstill, and recent talks yielded no concrete results.

The U.S. is "not prepared" to make the deal that the Chinese would like, Trump told reporters at the White House on Wednesday.

"We'll continue to talk to China," he said. "I have great respect for President Xi [Jinping]. ... But right now, we just can't make that deal."

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