US technology groups seek key product protections against Chinese tariffs

Cisco, Dell, Hewlett Packard Enterprise and Juniper Networks have issued a call to the Trump administration to protect key products from $ 200 billion of new tariffs on Chinese imports. commercial war with Beijing.

The four US technology companies said in a joint letter to US trade representative Robert Lighthizer that tariffs on network equipment would raise prices for consumers and delay investment, likely leading to job losses for shareholders.

"If USTR imposed an additional 10 to 25 per cent on networking products and accessories, it would cause disproportionate economic harm to US interests, including our US companies and workers, our customers, strategic priorities," said letter sent Thursday.

The warning came on the last day of a comment period convened by the Trump administration to seek advice on the proposed new tariff cycle, which adds to the $ 50 billion tariffs on Chinese imports already introduced this year. At any time after Thursday's deadline, the USTR could continue to apply the new tariffs, which should be respected thanks to retaliation by Beijing, greatly increasing trade tensions between the two giants of the global economy. .

The joint statement marks a break with the approach taken by most major US companies, few of whom have ruled directly against the administration's commercial policy, despite concerns over its impact on their business.

The public opposition statements of Lance Fritz, executive director of Union Pacific, and Tom Linebarger, chief executive of Cummins, have been exceptional. Many leaders have chosen to let their lobby groups or corporate advocacy groups such as Business Roundtable and the US Chamber of Commerce demonstrate this.

Josh Bolten, President and CEO of the Business Roundtable, told the Senate Committee on External Relations in July that the imposition of section 301 tariffs without serious negotiations unnecessarily put jobs, families and the economy at risk. Americans in a growing trade confrontation. .

But Cisco and its three partners in the letter felt the need to speak individually about the dangers of tariffs for their businesses, as the list targets a wide range of components and end products essential to the data centers of the industry. cloud computing, which are at the heart of today's digital infrastructure.

Tax-priced imports include servers, routers and switches, which handle data processing and communication. They also include components such as motherboards and memory modules, imported by major hardware manufacturers to include in products built in the United States, as well as cloud computing companies such as Google, Amazon and Facebook who assemble machines for their own data centers.

The rates would affect companies involved in building an Internet infrastructure at a critical time. Leading US cloud companies, led by Amazon, Microsoft, and Google, are at the heart of a capital investment boom as they attempt to build cloud platforms to meet the growing demand for their own services. . It has also helped hardware manufacturers such as Cisco to experience the strongest growth in several years.

Thursday's letter – signed by Jeffrey Campbell, Vice President for Government Affairs in the Americas for Cisco; Michael Young, Senior Vice President of Global Government Affairs and Public Policy at Dell; Maria Cino, Vice President of Corporate Affairs at HPE *; and Meredith McKenzie, Juniper's vice president and junior general counsel, warned of the prospects of their sector in a trade war with China.

As it became more expensive to operate data centers and switching stations, ISPs would raise prices for Internet and mobile plans – and consumers would be "doubly taxed for their use of the Internet." They also said that the deployment of 5G technology would suffer a "detrimental impact" exactly when the US technology sector is competing with China for primacy in this area. Companies also feared that "foreign competitors in third-country markets" would gain market share if tariffs were imposed, and their own reduced profitability could lead to "hiring freezes, stagnant wages and even losses in wages. 'employment. dividend reduction and erosion of shareholder value ".

On Thursday, a survey by the American Institute of Certified Public Accountants revealed growing concern over the possible impact of rates in the American business world. The percentage of executives expressing confidence in the economic outlook for next year has fallen by 10 points in the third quarter between the beginning of the year and 69%, and only 4% said the stricter trade policies of the United States United% said they would suffer.

Other industries echoed the prediction of network companies that the cost of higher rates would be passed on to consumers, with companies ranging from Walmart to Whirlpool announcing price increases in recent months.

* This article has been modified to clarify that the signatory is Hewlett Packard Enterprise