Price increase is the only choice! Rising tariffs have made Silicon Valley high-tech enterprises ＂unable to sit still＂

　　CCTV News:Modern industry has already formed a transnational industrial chain with a highly detailed division of labor, and any problem in this industrial chain may "affect the whole body". The so-called "301 tariff list against China" of the United States has come into effect, involving 818 products worth about $34 billion. 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 really affected by the tariff increase far exceed this list.

　　journalistThe ball made in China looks ordinary, but its precision has reached 200 nanometers. Ball bearings are used in various machines, such as vacuum cleaners. At present, both the ball and the ball bearing are called ‘ List of 301 tariffs on China ’ Above. "

　　American Precision Parts Company is a distributor of precision bearing parts. On July 6th, the day when the United States started the 301 tariff on China, the bearings imported by this company from China were at sea, and the goods would be subject to a 25% tariff. However, Mr. Huo, the president of the company, said that he was not in a hurry.

　　David Huo, President of American Precision Parts CompanyIf possible, customers will look for alternative sources of parts, but many varieties will take a lot of time, because some of them are used for parts with high safety requirements, and some are used for some auto parts, which need a period of testing before application. Generally speaking, it may take four years to change suppliers. "

　　The rising cost caused by tariffs affects the downstream of the industrial chain.

　　David Huo said that as a distributor, the business volume of precision parts companies will not be greatly affected in the short term. For his customers, at present, there is basically no choice but to continue to use China accessories. If they don’t want to stop work, they can only pay the tariffs first and start to apply for tariff exemption from the US government. The cost increase brought by tariffs will be continuously transmitted down the industrial chain, and the bearing is small, but the impact will be very large.

　　David Huo, President of American Precision Parts Company"Power tools, agricultural equipment, mining equipment, all kinds of consumer products, from cars to dishwashers, and even computer hard disks have one or two bearings as long as they move."

　　At present, the main products that the United States imposes tariffs on China are industrial products, and bearings are only one of them. Although consumers do not buy them directly, the number of products affected in the end may be ten times or a hundred times more than those on the list. Even many high-tech enterprises in Silicon Valley in the United States can’t sit still.

　　Mourinho, Vice President of Technology and Innovation of Silicon Valley Leaders Organization: "Tariffs can’t solve any problems, but will only make it harder to do business here in Silicon Valley. As I said before, it will affect the global industrial chain and the price of accessories entering the United States."

　　Affected enterprises: price increase will be the only choice.

　　For some multinational companies, the most direct and simple way to deal with the tariff increase of accessories entering the United States is to put the finished products originally prepared for production in the United States to other countries for production, which will reduce employment in the United States; If the United States further expands the tariff list, whether it is multinational companies or small and medium-sized enterprises, price increases will be their only choice.

　　David Huo, President of American Precision Parts Company: "Price increase is the only choice. To produce the same bearings as China in the United States, the increased 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 statistics of the US Department of Labor, in the first quarter of this year, the prices of washing machines, including American domestic brands, collectively jumped by 17%. The current large-scale tariff increase measures in the United States basically took effect in June and July. Although there is a certain lag effect, the impact on consumers is coming soon.

　　journalist: "The US tariff list for China deliberately removes end consumer products such as televisions, but only one bearing exists in almost all household products around me. The added cost will inevitably be reflected in these daily necessities, and the final bill will only be paid by American consumers."