Technology firms oppose tariffs, support negotiations with China

A group of world’s leading technology companies expressed opposition to President Trump’s plans to slap billions in tariffs on Chinese products over lax intellectual property protection policies.

The Information Technology Industry Council (ITI) is urging the Trump administration to form a coalition of allies to pressure China into changing its trade practices instead of using tariffs as punishment.

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“We strongly encourage you and others in the administration to quickly mobilize a coalition of allies that will travel to China to negotiate a balanced, fair and reciprocal trade relationship, including implementation timelines and accountability mechanisms,” wrote ITI CEO and President Dean Garfield in a letter to Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer.

Garfield said that China has made many commitments over the years “however, a lack of vigilance in holding China accountable over the long-term — coupled with lengthy bilateral statements of commitments with no enforcement mechanism — has resulted in China reverting to unfair trade practices.”

Trump has said he will impose $50 billion in tariffs on Chinese exports to punish Beijing for alleged theft of U.S. intellectual property and for forcing American businesses hand over their technology.

China has in the past been persuaded to change its policies “where coordinated international pressure and the real threat of public embarrassment” has been employed.

“We know first-hand that such international coalitions do work,” he said. 

Mostly he blamed “a lack of vigilance” on the part of the United States in its failure holding China accountable.

He said the international coalition would be able to challenge China at the World Trade Organization.

The tech group represents more than 60 of the worlds’s top technology companies including Amazon, Facebook, MasterCard, Samsung, IBM, Microsoft and Apple that employ more than 7 million U.S. workers and are responsible for nearly 7 percent of the nation’s growth.

“It is time for the international community, led by the United States, to stand up and tell China that failure to adhere to international norms and obligations will no longer be tolerated,” Garfield said.

“The time to initiate negotiations is now,” he wrote. 

Garfield said while the group supports the Trump administration’s Section 301 investigation process, “we cannot support the heavy focus on tariffs as a solution.”

“Our opposition to tariffs is pragmatic. Tariffs do not work,” he wrote.

“Instead, they increase costs for American consumers, harm the American economy, inhibit job growth, and are inevitably reversed because of the negative economic impacts and political fallout.”