China and the U.S. reached an understanding on a bilateral agreement on expanding the scope of goods covered by the Information Technology Agreement (ITA), the White House announced November 10.
The agreement paves the way for “the resumption and swift conclusion of the first major tariff-cutting deal at the World Trade Organization (WTO) in 17 years, and promises a major boost to U.S. technology exports and the jobs that support them,” the White House said.
“A successful ITA expansion would allow substantial expansion of "Made in America" ITA exports to growing markets without the imposition of burdensome tariffs, and support tens of thousands of well-paying U.S. manufacturing and technology jobs.”
Under the agreement more than 200 tariff lines will be reduced to zero under an expanded ITA. Medical equipment, GPS devices, video game consoles, computer software and next generation semiconductors are among the high-tech products that will see tariff elimination.
"The ITA has played a central role in helping the U.S. semiconductor industry drive innovation, create jobs, lower consumer prices and connect communities throughout the world," said Brian Toohey, president and CEO, Semiconductor Industry Association.
"Today's agreement between the U.S. and China to expand the ITA is a hard-fought victory for the U.S. semiconductor industry and a big win for the U.S. economy and consumers around the world," Toohey added. "We look forward to all ITA countries finalizing a deal as soon as possible."
A sample of some of the impacted products and the size of the tariff reduction they would benefit from, include:
- Next generation semiconductors -- Tariffs up to 25% reduced to zero.
- Magnetic Resonance Imaging (MRI) machines -- Tariffs up to 8% reduced to zero.
- Computed Tomography (CT) scanners -- Tariffs up to 8% reduced to zero.
- Global Positioning System (GPS) devices -- Tariffs up to 8% reduced to zero.
- Printed matter/cards to download software and games -- Tariffs up to 10% reduced to zero.
- Printer ink cartridges -- Tariffs up to 25% reduced to zero.
- Static converters and inductors -- Tariffs up to 10% reduced to zero.
- Loudspeakers -- Tariffs up to 30% reduced to zero.
- Software media, such as solid state drives -- Tariffs up to 30% reduced to zero.
- Video game consoles -- Tariffs up to 30% reduced to zero.
- An expanded ITA would also eliminate import duties on a range of additional technology products including high-tech medical devices, video cameras, and an array of high-tech ICT testing instruments.
The White House cites industry studies which found that a successful expansion of the ITA agreement would eliminate tariffs on roughly $1 trillion in annual global sales of information and communications technology (ICT) products and increase annual global GDP by an estimated $190 billion.
There will also be an effect on jobs, according to the White House. “Because the U.S. is a global leader in high-tech manufacturing and production, industry also estimates that an expanded ITA will support up to 60,000 additional U.S. jobs. In addition, an agreement will lower costs for downstream manufacturing and services industries that rely on ICT parts and components as inputs, increasing their competitiveness.