This second wave of tariffs was halted pending the outcome of a lengthy trade summit between the US and China. Whatever decision is reached will have enormous consequences for producers and consumers, who may see prices rise and investments delayed. That could lead to reduced growth, stock market drops and people losing their jobs, especially in the high-output, low-margin component industry.
Some Chinese companies attending CES are reticent to talk about what could happen in the coming weeks. An American employee of a Chinese company said that their CEO had told them all to avoid talking politics at the show. Several other businesses were similarly unwilling to speak publicly on the matter. The implication was that they may face reprisals from Beijing for engaging with a journalist.
"[a trade war] would be bad for all of us, and hurt all of us."
Breswell Su, sales manager at a large Chinese electronics conglomerate, said that tariffs are a "huge concern." He explained that, as the "economic situation gets intense," the imposition of tariffs will only be one of a number of problems. A fall in the value of the yuan, for example, will increase costs and squeeze the industry's already-slender margins. He added that companies will look to survive on tiny margins and attempt to recoup their losses by pushing harder into other territories.
Employees at one Shenzhen-based maker of battery packs and headphones felt that the trade war would not affect them. Representatives said that their products may avoid tariffs altogether because they're shipped via Hong Kong. From there, hardware is delivered to an Amazon warehouse, which fulfils its global shipping obligations.
Schumacher Electric produces battery charging equipment and has manufacturing facilities in China, Mexico and Belgium. Product Engineer Linh Nguyen said, if tariffs are imposed, his company will simply make sure that hardware imports to the US come from the Mexico plant. "Politics is temporary," he added, saying that the situation may change tomorrow, so it's a responsibility for businesses to be flexible.