China will suffer an economic shock if the US imposes more tariffs.

So far, most technology products have not been caught up in the trade war between the US and China. However, experts say that if US President Donald Trump carries out his threat to impose tariffs on all imports from China, the sector will be hit hard.

Rajiv Biswas, Asia-Pacific chief economist at IHS Markit, said items such as mobile phones, smartwatches and other wearable devices could be targeted in the new round of tariffs. Raymond Yeung, chief economist for Greater China at ANZ, also said mobile phones and other consumer products would be hard to escape.

“If the US government imposes a third round of tariffs on another $267 billion of Chinese goods, it will be a huge economic shock to Chinese exporters,” Biswas said. According to ANZ, the main products that will be affected are consumer products, which account for 45% of China’s exports to the US.

The US government imposed a 10% import tax on $200 billion worth of Chinese goods earlier this week. That figure will rise to 25% early next year. Mr. Trump threatened that any retaliatory move by China would prompt Washington to “immediately pursue phase three, which is tariffs on approximately $267 billion of additional Chinese goods.”

The new round of tariffs, according to Biswas, could hit large multinationals that manufacture in China for export, as well as small and medium-sized Chinese businesses that are part of the global supply chain. While China could still manage the economic impact if the US imposed tariffs on all of its goods, a recent report by JP Morgan said unemployment could still skyrocket.

The bank estimates that China could lose about 3 million jobs if it does not respond to the next round of US tariffs. But if it imposes retaliatory tariffs, assuming the yuan depreciates by 5%, it would only lose about 700,000 jobs.

Biswas also stressed: “If multinational companies readjust their supply chains to manufacture goods outside of China and export to the US, Chinese small and medium-sized enterprises will face reduced orders and job losses.”

Automakers have already felt the heat, with the US imposing a 25% import tariff on cars made in China starting in July. Ford has canceled plans to sell its new Focus Active in the US. Volvo has moved production of the XC60 from China to Sweden. General Motors is seeking tariff exemptions for its Chinese-made Buick Envision.

China is limited in its ability to retaliate in kind because it does not import as much as the US. Last year, China imported just under $130 billion from the US, while exporting $505 billion to it.

Ha Thu(according to CNBC/Reuters)