SIIA: Trump Tariffs Threaten IOT Competitiveness

Says it will raise prices for everything from TV streaming devices to Fitbits
Author:
Publish date:
White-House-flickr.jpg

Software developers are telling the Trump Administration that its planned $200 billion in tariffs on Chinese products, specifically on transmission equipment and circuit board assemblies, threaten cloud computing and U.S. competitiveness in the Internet of Things.

That came in a letter from the Software & Information Industry Association to the U.S. Trade Representative.

Related: CTA Says New Tariffs Would Do Billion-Dollar Number on Economy

It said the consumer products affected, and for which those consumers will have to pay more, include bluetooth and other smart speakers, e-readers, gateways, fitness trackers, modems, routers, smart watches, streaming devices for your TV, wireless headphones. That translates to how consumers "manage tasks, watch videos, play games, monitor their health."

And the tariffs will be just in time to take a bite out of holiday season purchases, it added.

SIIA SVP Mark McCarthy said it supported combating unfair Chinese trade practices, but suggested that tit for tat, or tariff for tariff, was counterproductive. "Instead, we urge the Administration to work with our allies and other likeminded countries to develop a joint strategy to deal with China," he said.

"As a general matter, SIIA opposes tariffs as a means of changing other countries’ practices because they are usually not effective, and because they impose costs on U.S. consumers and businesses," McCarthy said.

"They are effectively a tax increase for individuals."

As a specific thing, it told the USTR it was worried about the impact of the tariffs on the "immense potential the United States has in developing the Internet of Things (IOT)." It also laid out what was at stake.

"In 2016, the United States led the world with respect to procurement of cloud computing services at $44 billion, followed by the EU at $14.5 billion, China at $1.2 billion, Brazil at almost $1 billion and the rest of the world at $15.7 billion. The global cloud services market is expected to reach $555 billion by 2020."

Those big numbers are at risk, SIIA said, "if it becomes too expensive to build data centers in the United States. While American firms could remain dominant for a while, cheaper inputs for foreign competitors will make them more competitive."

Related