Daily Management Review

FT: Trump tariffs will hit millennials


07/03/2018


New rules for the import of goods into the United States from China are coming into effect on Friday. From July 6, they will be subject to an additional 25 percent tax. Thus, Donald Trump tries to punish the PRC for "stealing commercial secrets, unfair trade and the damage to the US economy." However, the decision of the US president will first of all hit American companies and ordinary consumers, namely, millennials.



pexels
pexels
The introduced duties will affect many of the electronic devices most actively used by young people representing the generations of Y and Z. This is concluded by analysts of Flexport, which organizes the supply chain of goods and freight forwarding.

When the administration of Donald Trump announced the introduction of import duties on Chinese goods for a total of $ 50 billion, the US trade representative said that the list of taxable goods "does not include those that US consumers usually buy." Now it turns out his words weren’t completely true. For example, additional duties will now be levied on electronic cigarettes and accessories of brands popular in the US, such as Juul, Pax and Blu. Most of them are manufactured in China. The so-called Trump tariffs will also cover electric scooters, electric cars and electric bikes, which have become popular with young people recently.

"Most of these products are used by millennials and representatives of the Z generation. Young people are much quicker to master gadgets," Tiffany Zhong, founder of the analytical company Zebra Intelligence, told the Financial Times newspaper. "This will affect our generation and those people who want to create innovations based on hardware products" . Among the goods that will be subject to additional duties are many "smart home" devices, such as smart thermostats or Internet-connected LED lamps. The list also includes disk drives, batteries and navigation devices.

American technology companies now need to understand how to respond to the rising cost of imported goods.

In fact, business is faced with a choice: either to reduce staff and cut costs, or shift import duties to buyers.

"Obviously, this is a serious concern for us, both small and large companies," said Rick Kowalski, an analyst at the Consumer Technology Association. "It does not matter what the motive was (for imposing import duties). For the most part, the costs will fall on the shoulders of buyers or on the American business, which purchases from Chinese companies."

source: ft.com






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