IBM Urges Biden to ‘Immediately’ Lift Tariffs on Chinese Tech Components
Section 301 tariffs raised IBM's sourcing costs by tens of millions of dollars, and on Dec. 2 the company asked the incoming administration to “immediately” remove the tariffs on tech inputs such as mechanical parts, fans, power distribution units, power supplies, cables and printed circuit board assemblies. “A limited, early removal of the most counter-productive of the China tariffs could provide relief for U.S. manufacturing, while leaving the new Administration space to negotiate further tariff changes based on Chinese market access commitments,” said Alan Kohlscheen, IBM's import compliance executive, and Michael DiPaula-Coyle, IBM's director of international trade policy.
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The “imports do not represent high-value technology products -- rather, they are necessary inputs into U.S.-made systems and include such items as printed circuit board assemblies, mechanical parts, fans, power distribution units, power supplies, and cables -- largely available only from Chinese sources,” they said. The incoming administration “can give a direct boost to U.S. manufacturing through targeted tariff relief on these sorts of component parts and inputs,” Kohlscheen and DiPaula-Coyle said. “Such a step would provide immediate benefits to U.S. manufacturing while also redirecting U.S. policy toward more international, and coordinated, action to address Chinese market access issues.”
The Office of the U.S. Trade Representative concentrated lists 1 and 2, the 25% level, on inputs, to avoid consumer pain. But IBM argues that its ability to manufacture in America -- and export about $8 billion in goods and services -- “requires sourcing from a complex, inter-connected global supply chain, which includes China.” The Joe Biden transition team didn’t respond to questions.