Tech companies are bracing ahead of the US presidential election, dreading the looming threat of more tariffs that could further restrict the flow of imports from China, no matter which candidate is elected.
Tariffs are a tax placed on imports and are intended to disrupt trade with foreign adversaries. While former President Donald Trump has frequently claimed that China pays for tariffs, in actuality, that tax is paid by US businesses and citizens any time they want to purchase a restricted good from China.
Used as a trade barrier, tariffs can place an economic burden on countries like China, but that burden is really only felt if businesses and consumers avoid importing goods. If companies cannot cost-effectively or practically switch suppliers—as is the case with China, which is a dominant global manufacturing hub in the tech industry—shrinking profit margins can trigger US businesses to spike prices for consumers.