The Trump Administration’s escalating trade war with China is hurting the information technology sector, the American consumer, and the U.S. economy.
As the leading voice of the information technology industry, the Computing Technology Industry Association (CompTIA), filed comments with the U.S. Trade Representative asking that a number of important products be removed from the latest list of U.S. products potentially affected by new tariffs.
I also discussed the impact tariffs will have on the cloud market with a reporter from The Wall Street Journal this week for the CIO Journal. (Check out that article here.)
The Trump Administration has proposed to impose additional tariffs of 10 percent to 25 percent on products from China with an annual trade value of approximately $200 billion. These include technologies that range from specialized equipment used by fashion houses to wireless antennas that are needed in order to deploy the 5G mobile networks so many communities in the U.S. desperately want.
Tech Products on The List
CompTIA opposes tariffs as a tool to remedy China’s unfair trade practices. Tariffs are a tax and we already are witnessing how the tariffs are making manufacturing in the U.S. more expensive. Therefore, we request removal of technology products from the proposed tariffs which include a wide variety of devices, equipment and components that touch the lives of businesses, consumers, and governments. Here are the items we want to be excluded from any new tariffs.
Transmission Devices
This is a big one. These devices include the routers and antennas that provide the backbone for Internet connectivity and are necessary for the Internet of Things (IoT) to operate. Practically every American household that accesses the Internet or uses consumer technology will be directly affected by these devices costing more money.
To put a finer point on this economic reality: A recent study showed that tariffs on these devices will increase costs for U.S. consumers by nearly $3.2 billion annually—up to a 22 percent cost increase for each device.
Bluetooth Headsets
While considerably fewer people are walking around these days with what most of us think of when we hear the word “Bluetooth” the technology behind it can be found in most wireless headphones used today. The technology also connects smartphones to portable speakers for those pool parties and smartwatches to smartphones.
Bluetooth Video Conferencing Unit and Video Conferencing Base Units
Video conferencing equipment can be found in almost every office these days and a growing number of homes. This technology enables doctor-patient consultations, student-teacher sessions, and more.
Video conferencing allows U.S. businesses and other organizations to stay connected while reducing operational costs.
Voice-Over-IP Adapters
Without these adapters, which allow standard telephones to be integrated into a VoIP telecommunication system, American businesses would need to make even greater investments into new equipment while sending the old phones to the landfill.
HD Videoconference Cameras
Video conferencing allows American businesses and other organizations to stay connected while reducing operational costs and enabling telecommuting. These particular tariffs also would have a negative impact on teachers and students because of distance learning programs, and doctors and patients now that telemedicine is so important to delivering the best possible care to patients regardless of where they might live.
Routers and Switches
The telecommunications sector would experience severe economic harm if tariffs on these vital pieces of networking equipment are put into place. Our nation’s wired and wireless networks depend on routers and switches to keep voice and data traffic moving. The impact doesn’t stop at telecom companies because businesses, governments and consumers depend on connectivity daily.
Standalone Desktop Computers and PC Components
A considerable number of U.S. businesses and households rely on desktop computers. On the business side, small and medium businesses will most likely be affected by higher price tags on desktop computers. Consumers will have to pay more for computers, and that will in turn hit retailers.
Printed Circuit Board Assemblies (PRBAs)
The future of cloud computing and all the benefits this entails are at stake if circuit boards are affected by new tariffs. The technology inside the thousands of datacenters that dot the American landscape now require computing equipment that need these components. Taxing these components would make it far more difficult to build and operate data centers and other technical facilities in the U.S., and would massively damage U.S. leadership on cloud technologies.
Augmented Reality (AR) and Virtual Reality (VR) Products, Components and Accessories
Industries across the U.S. are just beginning to adopt AR/VR products for use in advanced research, worker training, healthcare, commerce, and communications. If tariffs are imposed on AR/VR products, competitors in Asia and Europe would gain a significant competitive advantage in the U.S. market that they would use to wrest industry leadership from the United States.
The proposed tariffs would also have a significant negative impact on the highly-skilled U.S. workers who are employed in the growing industry. It is a critical time for the industry as consumers decide whether to adopt this emerging technology. Tariffs would significantly raise the costs of AR/VR products, frustrating the U.S. industry’s efforts to encourage adoption by reducing prices and hurting sales.
Tariffs Will Hurt American Tech Companies
These are just a few of the tech products impacted by these tariffs. As you can see, it’s another broad swipe at computing and technology goods that businesses, citizens, and governments rely on each and every day.
These tariffs will create irreparable harm to America’s tech companies, the 11.5 million Americans that work in tech occupations, and consumers who rely on affordable technology in their daily lives. Tariffs will result in higher costs for American manufacturers and suppliers and decrease the overall global competitiveness of U.S.-based tech firms.
These products are critical to major strategic priorities such as global leadership in artificial intelligence (AI), deployment of 5G communications networks, the Internet of Things (IoT), among others.
The bottom line: These tariffs hurt American tech companies and do little to nothing to curb China’s ongoing actions that continually inflict pain on U.S. companies doing business there.
We continue to urge the Trump Administration to work with Congress and other stakeholders to create a comprehensive strategic policy that can effectively address the longstanding challenges posed by China to the U.S. tech sector.
We also urge the U.S. to continue negotiations with China to achieve a favorable resolution on several vital issues that include establishing global standards for the cross-border flow of data, better access to China for U.S.-based cloud computing service providers, the creation of more equitable cybersecurity laws and regulations, and establishing better protections for U.S.-based intellectual property.
Stefanie Holland is CompTIA's director of International Government and Regulatory Affairs.
