Developers Alliance Joins Industry Letter to President on Tariffs

On March 18, the Developers Alliance joined over forty associations representing many industries including technology, to warn against trade tariffs on China. You can download the letter here

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Dear President Trump,

As representatives of the U.S. business community, we continue to have serious concerns regarding China’s trade policies and practices, including market access barriers and statedirected investment policies, technology transfer and data localization mandates, policies and practices that prevent setting market-based terms in licensing and technology-related negotiations, and theft of trade secrets and other intellectual property. These persistent problems jeopardize U.S. global competitiveness, innovation, productivity, and cybersecurity. We recognize the U.S. Government’s examination of these issues through the 301 process, and support an effort to address China’s discriminatory practices.

However, we urge the Administration to take measured, commercially meaningful actions consistent with international obligations that benefit U.S. exporters, importers, and investors, rather than penalize the American consumer and jeopardize recent gains in American competitiveness.

The imposition of sweeping tariffs would trigger a chain reaction of negative consequences for the U.S. economy, provoking retaliation; stifling U.S. agriculture, goods, and services exports; and raising costs for businesses and consumers. The Administration should not respond to unfair Chinese practices and policies by imposing tariffs or other measures that will harm U.S. companies, workers, farmers, ranchers, consumers, and investors.

Tariffs would be particularly harmful.

  • Tariffs on electronics, apparel, and other consumer products would increase prices for U.S. consumers and businesses, while doing little to address the fundamental challenges posed by unfair and discriminatory Chinese trade practices. These increased costs would effectively levy a tax on U.S. consumers and businesses, negating gains for American workers from U.S. tax reform.
  • Tariffs would not only affect Chinese shippers but also harm U.S. companies that sell component pieces of final products exported from China.
  • Tariffs would harm community service providers—including American health care, education, and emergency responders. These essential services rely heavily on consumer electronics and other imported goods, and would be negatively affected by increased costs.
  • Tariffs on product components would hurt U.S. manufacturing exports by making it more expensive to obtain key inputs and disrupting existing supply chains. This would have a negative impact on American jobs. In 2017, manufactured goods made up more than 85 percent of U.S. exported goods, totaling $1.3 trillion.
  • Tariffs that result in reduced consumption of products would also depress financial markets—a decline in ICT product purchases alone could result in a potential decrease of GDP by $11 billion for every percentage of stock value lost.

There are alternatives to address China’s policies and practices that would not have the same adverse impacts on U.S. consumers, businesses, and local communities or undermine the benefits of the tax reform. In particular, it is critically important that the Administration work with like-minded partners to address common concerns with China’s trade and investment policies. Imposition of unilateral tariffs by the Administration would only serve to split the United States from its allies, hinder joint action to effectively address shared challenges, and ensure that foreign companies take the place of markets that American companies, farmers and ranchers must vacate when China retaliates against U.S. tariffs.

We urge the Administration not to impose tariffs and to work with the business community to find an effective, but measured, solution to China’s protectionist trade policies and practices that protects American jobs and competitiveness. Consistent with Section 304 of the Trade Act of 1974, we request that the Administration allow industry experts the opportunity to comment on these issues, including the economic impact of any potential actions.

Sincerely,