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The tariff’s that were put into place in September have caused some technology suppliers to increase prices by 10%. Now with tariffs on Chinese imports going into effect on January 1, 2019, you could face another increase in prices to the tune of 25%.
What Are The Specifics Of The New Chinese Tariffs Policy?
According to the United States Trade Representative (USTR), about $200 billion of imports from China will be subject to the additional tariffs.
Unfortunately, China isn’t changing its policies of unfair acquisition of U.S. technology and intellectual property. Instead, of doing this, they responded to the United States’ tariff action by taking further steps to harm U.S. workers and businesses.
Because of this, the President directed the USTR to increase the level of trade covered by the additional duties to 25% in order to eliminate China’s unfair policies. The Administration will continue to encourage China to promote fair trade with the United States. We hope this will happen before January 1st.
What Happens If The Chinese Don’t Decide To Change Their Unfair Policies?
The Consumer Technology Association (CTA) estimates that a 25% tariff on printed circuit board assemblies (a critical component for the servers that power data centers) would increase in price by more than 6 percent and reduce consumption by nearly 12 percent in 2019.
This will also affect connected devices like routers, modems, and products like the Internet of Things (IoT)-based devices. This means that businesses will be forced to choose between forgoing these technology purchases or paying the price and cutting back on other things like new projects or hiring more employees.
Here’s a list of products that will be affected by the 25% increase in Chinese tariffs. (from Data Center Dynamics)
“nesoi” means Not Elsewhere Specified Or Indicated
Servers and storage:
Smartwatches and Bluetooth devices were taken off this list. Cisco, Dell, HPE and Juniper Networks all pressed the government to take networking and server equipment off the list, but they weren’t successful.
For those of you who are interested, this is the full list of items affected by the tariffs.
Even The Cloud Will Be Affected
The Information Technology and Innovation Foundation (ITIF) warns that Americans will be impacted by the tariffs for inputs to cloud computing and data services. They say that raising the cost of networking products would impede the development and adoption of cloud-based services and infrastructure. As important as cloud computing has become, this could have far-reaching effects.
As January 1, 2019, is fast approaching now is the time to seriously consider purchasing the technology you’ll need before the additional tariffs go into effect. Your projects will need to be put into motion by November 26th (the Monday after Thanksgiving). The equipment portion of the project will need to be ordered, and the labor started before the end of the year.