Smart watches, speakers escape Trumps tariffs
News & Trends •
the u.s. trade representatives office had said it was breaking out items such as smart watches fitness trackers bluetooth audio streaming devices and smart speakers into a new subcategory that would be exempted but it gave few details1 many high-profile consumer technology items such as smart watches and speakers were spared by the u.s. tariffs that hit some 200 billion worth of chinese products1 consumer tech industry officials and the u.s. customs and border protection agency say they expect billions of dollars worth of these products including those designed for home use will be subject to the 10 per cent tariffs activated on monday1 the move will effectively create a two-tiered tariff structure for consumer internet with many products such as fitbit fit.n fitness trackers apple incs aapl.o watch and amazon.com incs amzn.o echo smart speaker being favoured over routers and internet gateways from arris international arrs.o netgear ntgr.o d-link 2332.tw and others1 were operating under the assumption that the tens of millions of devices that deliver high-speed internet into consumers homes will be impacted by these tariffs said jim brennan arris seniour vice president of supply chain quality and operations1 it feels anti-consumer because our devices are what enables the core of consumer tech brennan told reuters1 the modems routers switching and networking gear that keep the internet functioning were not included in a newly created u.s. tariff code that was exempted from the latest china tariffs a spokesperson for the u.s. customs and border protection agency said1 the agency has made no distinction between consumer-use modems and routers and the commercial network equipment used by data centers and broadband internet providers1 most new internet-connected devices had been lumped into a broad category in the u.s. harmonized tariff schedule 85176200 machines for the reception conversion and transmission or regeneration of voice images or other data including switching and routing apparatus1 the catch-all category saw 23 billion in u.s. imports from china and 47.6 billion from the world last year. it was the largest component of u.s. president donald trumps latest tariffs targeting chinese goods1 but the less flashy home modems routers and internet gateways that make them work werent so lucky1 according to a notice posted by the u.s. international trade commission computer modems would stay in a separate sub-category while switching and routing apparatus would be put into a new sub-category. neither of these sub-categories were granted exemptions from the tariffs1 although we have not had occasion to issue rulings on the scope of a provision for switching and routing apparatus we agree that as a general matter modems routers and networking equipment will be subject to the remedy a customs and border protection spokesperson said late on friday referring to the 10 percent tariff1 it was not clear how much of the 23 billion in chinese imports within the catch-all category could escape tariffs but a reuters review of industry data suggests the share could be small1 u.s. census bureau data has not yet captured the volume of annual imports from china or any country of the goods that will be exempt1 but the consumer technology association estimates that the u.s. market for fitness trackers smart watches smart speakers and wireless earbuds and headphones was 8.2 billion in 2017 with forecast sales of 11.6 billion for 20191 even if china produced a majority of those goods exemptions would only apply to a fraction of the 23 billion category1 cta has forecast direct sales of modems and routers to consumers at 2.3 billion for 2019 up from 2 billion in 2017 excluding the products supplied directly by cable and broadband internet providers and equipment used in data centers and other infrastructure outside the home1 but the group argues that consumers will bear the costs of the tariffs even if their service provider buys the modems1 overall access to the internet will get more expensive mobile plans will get more expensive and connected devices that go to your smart phones will get more expensive because everything speaks to each other said izzy santa director of strategic communications for cta. reuters1