Trade tensions between the US and China are on the peak. The Trump administration is imposing more and more duties on Chinese materials to protect its industries from China’s unfair trade. However, despite the protectionist measures, the US may put on risks its industries mainly by increasing production costs.
Initially, the tariffs were imposed on $34 billion worth of Chinese goods, while later on, in July 2018, the tariffs were threatened to increase to $200 billion worth of Chinese goods. The list mostly contains tech related products including semiconductors as well as semiconductor manufacturing equipment.
The US is the largest semiconductor market in the world, but still, semiconductor imports from China amounted to more than $1 billion in 2017. Duties on semiconductor manufacturing equipment will affect both manufacturers and consumers as the costs need to be absorbed by the supply chain and eventually to be shifted to consumers.
Autonomous technology is in a nascent stage. Since, the chip is an essential component in autonomous vehicle technology, so any increase in chips prices will increase costs for suppliers and automakers. Automotive companies have already been investing a considerable sum on R&D and costly sensors for developing autonomous technology. So, any further increase in costs would result in an adverse impact on the autonomous industry.
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