US-China trade wars could pull in Google, Facebook

(FinancialPress) —Silicon Valley is feeling the trade wars‘ heat.

The White House is weighing in on imposing tariffs on networking equipment imported from China. Companies that source their cloud computing equipments from the Asian market could see themselves affected by the proposed move, according to market experts. Notables in that group include Amazon (AMZN),, Facebook (FB), and Google (GOOGL).

Added to that, American chipmakers such as Intel (INTC) could find themselves fronting the cost of additional tariffs on computer chips. While they are fully manufactured in the US, their products are later shipped to China for testing, assembly and packaging. The outsourcing could end up with the manufacturers paying a penalty when bringing their products back into their country of manufacture.

Silicon Valley had managed to keep itself off of the trade dispute‘s crossfire this far. However, with new tariffs threatening the bottom line of their tech products, their industry leaders may have to take a stance on the issue soon.

Daniel Ives, CSO and head of technology research for GBH Insights, feels that “[as you see] what types of products they’re hitting, I think it becomes a lot more tangible, and a lot more real” for tech companies.

The list of Chinese products worth $200 billion that will have to pay a 10% tariff by the end of the month includes modems and routers. The penalty will surely affect the technology sector negatively, as massive IT networks are necessary to distribute its services and goods globally.
The US imported approximately $11.5 billion in IT networking goods from China in the 12 months between April 2017 and April 2018, as shown in data provided by global trade research company Panjiva.
The new tariffs will force American companies to either source their products from alternative markets, such as Malaysia or Vietnam, or to find a way to handle the increase in costs – added Panjiva analyst Chris Rogers.
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