In the June 2018 issue of Security Dealer & Integrator magazine, we examined the impending trade war between the U.S. and China and its potential impact on various segments of the security industry. In the time since the story went to press, the Trump administration has finalized the list of products that will be subject to this initial round of tariffs, which includes goods that have an annual trade value of approximately $34 billion.
The latest round, which went into effect on July 6, is wide ranging and includes everything from consumer goods, such as fruit, nuts, textiles and furniture to industrial computers, components and circuit boards.
The general classification of “Automatic Data Processing Machines” includes virtually every category and I/O device used in processing and storing data. In addition, the callout of circuit board assemblies and components may impact the emerging residential and DIY security markets using small single-board microcomputers like Raspberry Pi, Arduino and Odroid products.
ATM payment terminals are also listed, which will impact both the banking and retail sectors as POS terminals, touchscreens and mobile POS devices are often integrated with surveillance and burglar alarm systems.
The domestic U.S. gas separation industry should get a boost from new tariffs on oxygen, nitrogen, argon and hydrogen, which impact the manufacturing and healthcare verticals. Precious earth metals like tantalum, titanium and silver are tariffed, however; the most significant are refined copper rods and stock, sure to impact the global industrial ethernet cable market, now enjoying compound annual growth rate of 17.31 percent by 2020.
However, the most far reaching item listed is simply entered as “burglar alarm systems.” Here is a look at some additional products, in decreasing order from high to low impact that will be affected by the tariffs:
(Note: The official U.S. Trade Representative’s Office (USTR) document (USTR-2018-0005) are classified in 8-digit subheadings; thus, where possible, the Harmonized Tariff Schedule (HTS) eight digit number will be listed in parentheses for reference purposes)
High Impact:
- Copper wire, stock; used for Ethernet cable (7407.10.50, 7408.11.30, 7411.10.10): Will increase the cost of CAT5E, CAT6A cable using imported Cu stock.
- Electric burglar or fire alarms and similar apparatus (8531.10.00): Two of the largest product segments used by security, safety and facility management practitioners.
- Printed circuits, without elements (8534.00.00): Wide ranging use among industrial, residential and DIY security market segments.
- Projection lenses, mounted, and parts and accessories therefor, for cameras, projectors or photographic enlargers or reducers (9002.11.40 ) and mounted objective lenses for use in closed circuit television cameras/nounted lenses, n/obj., for use in closed circuit television cameras (9002.11.40 and 9002.11.60/9002.90.85: Affects CCTV and network surveillance cameras.
Medium Impact:
- Unit suitable for physical incorporation into automatic data processing machine (8471.80.40 ): Computers, servers, power supply, I/O, CPU, drive components now included in tariff.
- Cards incorporating a magnetic stripe (8523.21.00 ): Although most of the time & attendance and physical access control industry promote proximity cards, there are still many end-users and government agencies using “mag-stripe” readers and cards.
- LED and LCD Panels, parts and PCBs of electric sound or visual signaling apparatus (8531.20.00 8531.90.30 8531.90.90 ): Many solution providers have analog and network horns and speakers, and horn/strobe signaling devices in their product range.
- Other parts of microphones & stands, loudspeakers, headphones & earphones nesoi, electric amplifiers, & electric sound amplifier sets (8518.90.81).
Low Impact:
- Automatic Teller Machines (8472.90.10 ): Impacts both banking and retail sectors as POS terminals, touchscreens and mobile POS devices are included, often integrated with surveillance and burglar alarm systems.
- Lead Acid Batteries (8507.20.80): Used in solar, burglar and fire alarm systems.
- Electric heating resistors assembled only with simple insulated former and electrical connectors, used for anti-icing or de-icing (8516.80.40, 8516.80.80): Impacts weather-resistant camera housings and other control enclosures.
- Television cameras, digital cameras and video camera recorders. Cinematographic cameras (8525.80.30, 8525.80.50, 9007.10.00 ): Although a small portion of the security industry uses “broadcast” or cinema-quality cameras to stream events, this subsegment is growing.
About the Author:
Steve Surfaro is Chairman of the Public Safety Working Group for the Security Industry Association (SIA) and has more than 30 years of security industry experience. He is a subject matter expert in smart cities and buildings, cybersecurity, forensic video, data science, command center design and first responder technologies. Follow him on Twitter, @stevesurf.
