China Tariff Balancing Act Goes Tech

US tech companies win changes in bill to limit China access to technology.

US relations with China have been strained in recent weeks, largely stemming from tariffs and legislation that have been put forth to prevent China from making as much of a profit via US goods and services.

While the administration’s proposed tariff on steel from China has actually brought manufacturers out in full force to oppose the price hike involved in purchasing domestic steal, the tech giants have managed to demand changes to a bill aimed at another obstacle.

Originally, a proposed Senate measure would limit China’s access to certain US-made technology, but the tech sector rallied to explain to these proposed measures would make a serious dent in domestic profits when Chinese consumers could no longer purchase US tech exports.

US tech companies win changes in bill to limit China access to technology.

Broaden reach

According to Reuters, “The bill in the Senate and a companion measure in the U.S. House of Representatives would broaden the reach of the inter-agency Committee on Foreign Investment in the United States (CFIUS) in hopes of halting Chinese efforts to acquire sophisticated U.S. technology. The bipartisan legislation has the support of President Donald Trump’s administration.

“Tech companies criticized the original legislation amid concerns it could limit or slow their exports, which in 2016 totaled $153 billion, according to World Bank data. Among the companies lobbying for the changes were Google parent Alphabet Inc, Facebook Inc, IBM Corp, Intel Corp, Qualcomm Inc and a long list of other hardware and software companies”.

Sensitive tech 

Essentially, new restrictions put in place under the administration would make the sale of sensitive tech like microchips even more arduous. The tech giants argued that these new rules could put them in front of review boards for every product they develop, despite the fact that there are already oversight groups that monitor the sale of these products abroad. The end result would be another hoop to jump through for supposed security reasons, causing both an increase in their costs and redundant delays.

Oversee

While the requested revisions that curbed the new watchdog’s oversight were implemented, the new draft still gives the government even more ability to oversee investments and joint ventures between US and Chinese tech companies.