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Tech sector breathes easier with US-China trade pact

The tech industry is breathing a sigh of relief after the U.S. and China agreed to substantially lower tariffs, underscoring the prospect of de-escalation in a trade war that has been particularly challenging for the sector.

© AP Photo/Manuel Balce Ceneta

The two countries appear to be walking back from a costly tit-for-tat exchange on tariffs, announcing a 90-day reduction in import taxes as they continue to negotiate a longer-lasting deal.

The tech sector saw its stocks tumble earlier this year as massive tariffs threatened to strain supply chains and raise consumer prices.

While it received some relief last month when President Trump exempted electronics from the import taxes, the industry’s outlook is even more optimistic now as tensions ease.

“It’s a relief valve for U.S. Big Tech,” Wedbush Securities analyst Dan Ives told The Hill. “It takes the nightmare supply chain situation off the table.”

The U.S. and China announced Monday that they had agreed to reduce tariff rates for 90 days amid negotiations.

The U.S. will lower tariffs on Chinese goods from 145 percent to 30 percent, while China will reduce import taxes on American goods from 125 percent to 10 percent.

The trade truce marks a sharp departure from months of escalation between Washington and Beijing.

“It’s de-escalation from what could have been an incredibly damaging set of outcomes for both China and the United States if those tariffs stayed in place at those very high rates,” said Ed Brzytwa, vice president of international trade at the Consumer Technology Association.

“So, in my view, cooler heads are prevailing,” he added.

Read more in a full report at TheHill.com.

Welcome to The Hill’s Technology newsletter, we're Miranda Nazzaro and Julia Shapero — tracking the latest moves from Capitol Hill to Silicon Valley.

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