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Trump Tariffs on Chinese Telecom Gear Worries US ISPs

While the telecom sector are thrilled that the Trump administration has killed popular consumer protections like net neutrality, they're not quite as thrilled about a trade war with China. Reuters notes that the Trump administration is considering tariffs on up to $60 billion of Chinese imports, predominately focused on Chinese telecom goods. The goal, as it has been with the pressure on AT&T and Verizon to stop doing business with Huawei, is to protect U.S. companies from Chinese competition and China's tendency to skirt over and around international trade agreements.

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But many of these same companies rely on Chinese hardware (or parts of hardware) for their own deployments, and are wary of the higher consumer and business costs resulting from a new trade war.

"It’s unclear exactly how the possible action--which appears to still be in the planning stages and might not happen--could affect U.S. telecom companies," notes Fierce Wireless in response to the report. "However, if Trump does impose tariffs on telecom equipment from China, the action likely would raise the price of that telecom equipment for U.S. companies. Further, the action could spark a response from China--the world’s largest wireless market."

Both AT&T and Verizon earlier this year were pressured to scrap smartphone deals with Huawei due to vague "national security concerns." But an 18 month government investigation found no evidence that Huawei had spied on American citizens. What evidence that does exist tends to suggest that U.S. telecom companies like Intel and Cisco enjoy hyping the potential Chinese spying threat in order to prevent additional competition in the US networking gear and smartphone market, often disguising this protectionism under the umbrella of national security concerns.

And while China certainly does spy and engage in bad behavior (like most major powers), the breathless hysteria surrounding companies like Huawei tends to ignore the fact that Snowden documents revealed the United States was caught hacking into Huawei in a quest to install back doors in their products, and was also caught covertly intercepting Cisco shipments to install backdoors as well.

This "do what we say, not as we do" approach hasn't fared particularly well so far, and many trade experts don't believe additional tariffs are likely to help matters if the end result is a trade war that drives up costs for everybody in the telecom supply chain (all costs that will be passed on to you, the consumer).

Most recommended from 68 comments



TheToro
Premium Member
join:2003-06-05
Atlanta, GA

17 recommendations

TheToro

Premium Member

they do same thing

Im far to be a Trump supporter but i see his point here, China has so many rules and laws about what foreigners and foreign companies can do in China that its about time that the western countries do the same thing to them.
microphone
Premium Member
join:2009-04-29
Parkville, MD

6 recommendations

microphone

Premium Member

Made in China?

Is the problem really the tariff or is it that the U.S. doesn't presently have the infrastructure in place to produce the necessary parts in sufficient quantities? Does anyone ever say, "I'm really glad this phone or device was made in China?" I see the tariff as encouragement to start making more things in the U.S.A.

SimbaSeven
I Void Warranties
join:2003-03-24
Billings, MT

4 recommendations

SimbaSeven

Member

iPhones?

Wait.. Aren't iPhones made in China?

*waits for the epic riots to happen*

sludgemaster
Premium Member
join:2005-12-06
Bronx, NY

3 recommendations

sludgemaster

Premium Member

Trump Tariffs on Chinese Telecom Gear

1. Tariffs are actually taxes on us. They will raise the cost of communications for everybody and put cash in the U.S. Treasury.

2. Historically, it is easy to see that protectionism does not work -- remember the Great Depression?

3. U.S. companies (through their subs) employ slave labor to produce goods offshore. The solution is to prohibit the sale of the products of slave labor in the U.S.
ohreally
join:2014-11-21

3 recommendations

ohreally

Member

So who will they use?

Cisco and Juniper are very weak on wireless networks, don't think either of them have a line of radios.

Lucent is now part of Nokia (Finland, though Alcatel-Lucent was already "French").

All network equipment companies offshore considerable amounts of R&D (or have bought up foreign companies to get into new sectors). There's no truly American telecoms manufacturer. That "American supplier" router may well have had a hardware design from China with Indian-produced software, and manufactured in Mexico

In a former life I worked for one of the "American" firms. Having totally failed to gain a foothold in a market through homegrown R&D, they bought the market leader - a European firm, and continued most operations from a couple of European countries.