US – China Trade War: American Electronics Manufacturers Report Lower Profitability, Less Hiring Due To Tariffs

U.S. electronics manufacturers are feeling the pain of the ongoing U.S.-China trade war, resulting in lower profits and slower hiring, a report by the Illinois-based electronics industry association IPC said Wednesday. Of the electronics manufacturers surveyed, 89% are worried about the impacts of higher tariffs.

These companies also claim that the tariffs are causing them to invest less in the U.S. and that they are hiring fewer workers. Some 69% of the companies surveyed say that the tariffs are causing lower profit margins.

IPC's chief economist Shawn Dubravac said that "it seems clear that profitability is impacting the ability of these companies to invest in the U.S."

One electronics manufacturer surveyed in the report said that "the tariff situation is creating serious issues with our customers. If we were able to source parts locally or from other countries, it would at least be a solution, but China is by far the largest manufacturing company in the world, especially for components. As a result, all we are currently doing is adding cost to the whole process, and I am not even including the administrative challenges this has put upon us."

The U.S. and China are still involved in trade negotiations after the two countries agreed on a phase-one deal. This partial deal will involve China purchasing between $40 and $50 billion worth of U.S. agricultural products, with the U.S. suspending a tariff increase from 25% to 30% on $250 billion of Chinse goods.

Trump has levied tariffs on China because he claims that Beijing has used currency manipulation to artificially lower the price of its goods, which he believes has decimated U.S. manufacturing.