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CTA’s Gary Shapiro Rails on ‘Isolationist’ Trump Tariff Policy

CTA CEO Gary Shapiro tells Fox Business Network that new 25% tariffs hurt American companies and will slow 5G adoption. Manufacturers begin raising prices.

CTA’s Gary Shapiro Rails on ‘Isolationist’ Trump Tariff Policy
"We are going to suffer and our kids are going to suffer in the long run for the short-term gain of punishing China," said CTA CEO Gary Shapiro on the Fox Business Network, speaking about the escalated Chinese tariffs.

Jason Knott · May 23, 2019

Saying the U.S. tariff policies are “putting an economic fence around the United States,” Consumer Technology Association (CTA) CEO Gary Shapiro warned viewers on Fox Business Network (FBN) channel that the impact on the consumer electronics industry could be significant.

“There is a lot going on at once and it is creating a bit of an economic crisis in our industry. On top of the 10% tariffs we are now facing 25% tariffs on all products,” he told FBN TV host Liz Claman.

“It’s not a great situation and we are creating false emergencies."
— Gary Shapiro, CTA

He says the tariffs are giving the message that “we don’t want to do business with the rest of the world. The U.S. is telling the rest of the world that we want to go alone. That is not a healthy thing for any American company. We are leading the world now in innovation, we have the best companies and the best strategy and we are stepping on it,” he says.  

Shapiro says the entire range of policies, including the tough immigration policy that is reducing the number of highly skilled workers entering the U.S and the restriction on using Huawei chipsets, are among the reasons the stock market has been so volatile. Shapiro warns the policies will slow down the adoption of 5G in the U.S.

Watch: Gary Shapiro Discusses Impact of U.S Tariffs on Consumers 

“It’s not a great situation and we are creating false emergencies,” he said. “On the other hand, China is unfair. We have to do something, but we have alternatives.

“My message is don’t throw away American industry, American farmers and all these other things where we are leading the world as part of this effort to become economically self-sufficient and isolationist. It’s really not worth it. We are going to suffer and our kids are going to suffer in the long run for the short term gain of punishing China.”

CTA is calling on its members to submit comments to the Office of the United States Trade Representative during the open comment period, which ends June 7, 2019. 

Meanwhile, manufacturers are beginning to implement higher prices to integrators. Savant issued this memorandum to its dealer base, for example:

As you know, government imposed tariffs have increased the costs of many electronic components. These increases began taking effect late 2018 and given the current economic conditions costs are expected to further increase on June 1, 2019.  Up to this point, Savant has absorbed the increased cost without impacting pricing, however with the latest news expected to be in effect June 1, we will be forced to share these costs with our valued customers.  

While many companies have chosen to increase pricing on their hardware, we have decided to simply add a percentage tariff cost to each invoice at a flat rate.  Highlighting the tariff specifically vs. a price change provides us flexibility to reduce or eliminate this charge as government trade policy changes.

Please note that effective Monday, June 17th each Savant invoice will reflect a tariff of 3.75% against all hardware on the order.  

We appreciate your continued support and will keep you informed as circumstances continue to evolve.  

Below is a PDF document on the tariffs titled "Requests for Emergency Clearance of a Collection of Information by the Office of Management and for Comments."

CTA China Tariff PDF



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  About the Author

Jason Knott is Chief Content Officer for Emerald Expositions Connected Brands. Jason has covered low-voltage electronics as an editor since 1990, serving as editor and publisher of Security Sales & Integration. He joined CE Pro in 2000 and serves as Editor-in-Chief of that brand. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He has been a member of the CEDIA Business Working Group since 2010. Jason graduated from the University of Southern California. Have a suggestion or a topic you want to read more about? Email Jason at jason.knott@emeraldexpo.com

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  Article Topics


Business · Business Operations · Educate Your Customer · News · Media · Videos · 5G · CTA · Huawei · All Topics
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Comments

Posted by JerryS on May 28, 2019

ccolwell artisticsystems.net It brings the cost of the Chinese goods more in line with the real cost of goods, not the artificially low price of them.  And I was just using your speakers as a general example - not necessarily buying from China. The fact is trade imbalance is NOT just $$$.  It is a lot more complicated than that. 
And look at the results.  Black and Decker just announced they were closing a plant in China and moving manufacturing back to a new plant in Texas.  You’re telling me that is not good?

Posted by ccolwell artisticsystems.net on May 28, 2019

JerryS you didn’t explain how the tariff’s would fix any of that.  In fact your logic is the inverse saying we are getting 5k worth of product for 10k.

Posted by JerryS on May 28, 2019

ccolwell artisticsystems.net That’s oversimplifying the situation.  The speakers are cheaper because China artificially keeps it’s Yuan low.  Additionally, the Chinese government subsidizes many of the companies there, making their costs lower.  Add to that their theft of American intellectual property (instead of paying for their own research and development) and the result is the Chinese economy is growing at over 6% per year - which is what’s causing the real trade imbalance.
If it weren’t for these factors the price of products coming out of China would be more in line with that of the rest of the world and trade would be more equitable - not just with the United States but with other countries, also.

Posted by ccolwell artisticsystems.net on May 28, 2019

JerryS - I Respectfully disagree.  Where exactly could you get these speakers for 5,000.00?  We bought from China because they were cheaper than anywhere else for a variety of reasons. If it wasn’t we would have bought somewhere else.  A trade deficit (or imbalance) is because we buy more from them than they do from us.  How exactly does the Tariff fix this? They will not buy more from us because we do not make what they want at a price they want to pay. There protectionist tariffs on us a are another issue.  Even if tariffs go to zero on both sides, we will buy more from them than they do from us. 

Posted by JerryS on May 28, 2019

ccolwell artisticsystems.net No, that’s where you’re wrong.  If you pay $10,000 to Sonance and get $10,000 worth of speakers, you have a balanced trade.  However, if you only get $5,000 worth of speakers, you have a trade imbalance.
Trade balance isn’t just the dollars involved - it is also the goods.  And for too many years we’ve been paying $10,000 for $5,000 worth of speakers.

Posted by ccolwell artisticsystems.net on May 28, 2019

JerryS.  Trade imbalance is a misnomer.  Imagine Sonance (or whoever’s speakers you buy) is a country.  You buy $10,000 worth of speakers from them and they send you speakers, and do not buy anything from you.  This is not a $10,000 trade imbalance, this is business.  They mae something you want at a price you want to pay for it.  Now if sonance stole from you that is something to discuss.  I personally have a trade deficit with Walmart and Titos Vodka, among many other items.

Posted by theloopboise on May 28, 2019

The part I wonder is where is all this money going?  This will bring in billions (if not trillions) into the US Government, basically as a tax to the end user.  My company like so many others is seeing our costs increase as a result, which we have to pass on to the customer.  So in reality this is just adding a tax onto the cost of everything made in China.  Unless the money is being passed back to Americans as a tax credit I don’t see how this is helping Americans.

Posted by JerryS on May 27, 2019

We are a long-time (over 15 years) member of CTA, but are considering dropping our membership over this and other positions of Mr. Shapiro.
Yes, this is costing us in the short term.  But “trade” means it is equitable for BOTH parties.  A $500 billion per year trade imbalance is not sustainable.  Previous Presidents (of both parties) have been so eager to make trade agreements that they have given away too much.  If Mr. Shapiro ever ran a small business, he would understand this is not sustainable in the long run.  And although the U.S. has a bigger budget, it’s not sustainable for the country in the long run, either.
President Trump is a businessman and understand this.  He wants trade agreements which are fair to all parties.
Maybe Mr. Shapiro would be willing to trade a brand new 2019 Cadillac for a used ash tray.  This is what the U.S. has been doing for decades.
But it’s a really nice ash tray!

Posted by Blefadts on May 24, 2019

Short term pain for long term success, or move your manufacturing out of China.

Posted by Blefadts on May 24, 2019

Short term pain for long term success, or move your manufacturing out of communist China.

View all comments.

Posted by David Casemore on May 23, 2019

I tried to bring this topic up with my friends at RemoteCentral.com

http://www.remotecentral.com/cgi-bin/mboard/rc-custom/thread.cgi?41843

Apparently this entire thing is my fault.

Posted by Blefadts on May 24, 2019

Short term pain for long term success, or move your manufacturing out of communist China.

Posted by Blefadts on May 24, 2019

Short term pain for long term success, or move your manufacturing out of China.

Posted by JerryS on May 27, 2019

We are a long-time (over 15 years) member of CTA, but are considering dropping our membership over this and other positions of Mr. Shapiro.
Yes, this is costing us in the short term.  But “trade” means it is equitable for BOTH parties.  A $500 billion per year trade imbalance is not sustainable.  Previous Presidents (of both parties) have been so eager to make trade agreements that they have given away too much.  If Mr. Shapiro ever ran a small business, he would understand this is not sustainable in the long run.  And although the U.S. has a bigger budget, it’s not sustainable for the country in the long run, either.
President Trump is a businessman and understand this.  He wants trade agreements which are fair to all parties.
Maybe Mr. Shapiro would be willing to trade a brand new 2019 Cadillac for a used ash tray.  This is what the U.S. has been doing for decades.
But it’s a really nice ash tray!

Posted by theloopboise on May 28, 2019

The part I wonder is where is all this money going?  This will bring in billions (if not trillions) into the US Government, basically as a tax to the end user.  My company like so many others is seeing our costs increase as a result, which we have to pass on to the customer.  So in reality this is just adding a tax onto the cost of everything made in China.  Unless the money is being passed back to Americans as a tax credit I don’t see how this is helping Americans.

Posted by ccolwell artisticsystems.net on May 28, 2019

JerryS.  Trade imbalance is a misnomer.  Imagine Sonance (or whoever’s speakers you buy) is a country.  You buy $10,000 worth of speakers from them and they send you speakers, and do not buy anything from you.  This is not a $10,000 trade imbalance, this is business.  They mae something you want at a price you want to pay for it.  Now if sonance stole from you that is something to discuss.  I personally have a trade deficit with Walmart and Titos Vodka, among many other items.

Posted by JerryS on May 28, 2019

ccolwell artisticsystems.net No, that’s where you’re wrong.  If you pay $10,000 to Sonance and get $10,000 worth of speakers, you have a balanced trade.  However, if you only get $5,000 worth of speakers, you have a trade imbalance.
Trade balance isn’t just the dollars involved - it is also the goods.  And for too many years we’ve been paying $10,000 for $5,000 worth of speakers.

Posted by ccolwell artisticsystems.net on May 28, 2019

JerryS - I Respectfully disagree.  Where exactly could you get these speakers for 5,000.00?  We bought from China because they were cheaper than anywhere else for a variety of reasons. If it wasn’t we would have bought somewhere else.  A trade deficit (or imbalance) is because we buy more from them than they do from us.  How exactly does the Tariff fix this? They will not buy more from us because we do not make what they want at a price they want to pay. There protectionist tariffs on us a are another issue.  Even if tariffs go to zero on both sides, we will buy more from them than they do from us. 

Posted by JerryS on May 28, 2019

ccolwell artisticsystems.net That’s oversimplifying the situation.  The speakers are cheaper because China artificially keeps it’s Yuan low.  Additionally, the Chinese government subsidizes many of the companies there, making their costs lower.  Add to that their theft of American intellectual property (instead of paying for their own research and development) and the result is the Chinese economy is growing at over 6% per year - which is what’s causing the real trade imbalance.
If it weren’t for these factors the price of products coming out of China would be more in line with that of the rest of the world and trade would be more equitable - not just with the United States but with other countries, also.

Posted by ccolwell artisticsystems.net on May 28, 2019

JerryS you didn’t explain how the tariff’s would fix any of that.  In fact your logic is the inverse saying we are getting 5k worth of product for 10k.

View all comments.