& cplSiteName &

Hey, Trump Tech Boosters, What About China Tariffs?

Dan Jones
1/6/2017
0%
100%

It has been fascinating to listen to executives from US mobile operators talk about how a Trump administration's corporate tax cuts and potential light regulatory touch could be great for the wireless industry over the last few weeks.

Now, I'm no economist -- although I did fall asleep during economics lessons in college quite frequently -- but being all happy-clappy about Trump's impact on telecoms seems to be only looking at one side of the picture to me. Sure, big service providers might be able to swallow smaller ones and pump bigly dividends back at shareholders. But, as the old song says: Is that all there is?

Well, I don't think so, at least not in this case. See, I haven't heard service provider execs talk about tariffs on Chinese manufacturing operations, which could make smartphones much more expensive.

Smartphones: The very lifeblood that has fueled the boom in mobile communications since the iPhone arrived in 2007 in the US, and before that in Europe and Japan. And they're largely manufactured in China.

Trump has not only talked about imposing tariffs on China but also named Peter Navarro -- who lives to take a poke at China -- to oversee US trade policy. So, ya know, it surely seems like tariffs on Chinese-made goods could be a thing. We really don't know for sure quite yet. (See Top 5 Tech Trump Expectations for 2017.)

So, why don't US wireless service providers talk about that aspect of the brave new Trumpian world? I have a little theory. The president-elect has demonstrated that he can knock stocks down with just a tweet. So maybe it is just best for operators to keep in his good books and say nothing?

Let me know what you think in the comments section below. Doesn't worry me, by the way: I don't own stocks in anything I write about.

— Dan Jones, Mobile Editor, Light Reading

(15)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
DanJones
50%
50%
DanJones,
User Rank: Blogger
1/24/2017 | 10:34:01 AM
Just to square the circle on this...
So the TPP is officially dead.

This makes -- from what I've read -- higher tariffs on AsiaPac imports and exports highly likely.

See: http://www.smh.com.au/federal-politics/political-news/the-slow-painful-death-of-the-12country-transpacific-partnership-20170123-gtxfbk.html

Meanwhile, Foxconn says it *may* build a factory in the US but no promises!

https://www.theguardian.com/technology/2017/jan/23/foxconn-american-factory-plans-trump

Yet automation is still the looming question mark over manufacturing jobs the world over. No one -- not Trump, not Clinton, nor Saunders -- even talked about that. I'm not convinced a 1950s manufacturing economy can recreated whatever.
DanJones
50%
50%
DanJones,
User Rank: Blogger
1/11/2017 | 1:38:33 PM
Re: Listening in on Trump's press conference....
Key takeaway for telecoms biz: Trump didn't let up or back down on the concept of using tariffs as a tool of political persuasion. In this case to prevent companies moving jobs overseas, but that could be very relevant to operators.
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
1/11/2017 | 11:46:17 AM
Re: Listening in on Trump's press conference....
Sad!
DanJones
50%
50%
DanJones,
User Rank: Blogger
1/11/2017 | 11:01:13 AM
Listening in on Trump's press conference....
Listening in on Trump's press conference at 11pm just in case he says anything relevant, not sure tariffs will be top of mind though!
DanJones
50%
50%
DanJones,
User Rank: Blogger
1/10/2017 | 1:29:01 AM
Re: Good point, well made
Hahahahaha, you've clearly never met Carol Wilson! No seriously, I take your point though, even assembling the iPhone in the US would require changes in logistics, and probably unforseen extra costs. Although it occurs to me that the new guy at the EPA could be so Lassiez Faire that maybe he would bring more silicon fab plants back to the US, they would take years to build though.
TV Monitor
50%
50%
TV Monitor,
User Rank: Light Sabre
1/9/2017 | 7:14:28 PM
Re: Good point, well made
Dan Jones

The real hurdle to US production is labor.

The reason the production cost in China is low is because of flexible hours; ie Chinese Foxconn and Pegatron workers will work upto 100 hours/week during the launch window period to meet the demand, then scale down to 50 hours/week when demand drops without hiring/firing workers.

Making Americans work 100 hours/week to meet the production quota is not possible, so Apple needs to have a longer production lead time to build a launch inventory, and this adds to cost.
DanJones
100%
0%
DanJones,
User Rank: Blogger
1/9/2017 | 12:45:33 PM
Re: Good point, well made
If they can find facilities to assemble it, I would expect more shortages and delays too. But yeah locally sourced components probably aren't happening.
TV Monitor
100%
0%
TV Monitor,
User Rank: Light Sabre
1/9/2017 | 11:54:28 AM
Re: Good point, well made
DanJones

If just the assembly is moved to the US, then $50 more.

If Apple chooses to move major component production to the US, then a lot more.
DanJones
100%
0%
DanJones,
User Rank: Blogger
1/9/2017 | 9:57:38 AM
Re: Good point, well made
Wonder how much a US-made iPhone would cost?
danielcawrey
50%
50%
danielcawrey,
User Rank: Light Sabre
1/7/2017 | 11:53:17 PM
Re: Good point, well made
We're certainly seeing companies really think about where they make products these days. Apple is going to be one of those, even if most of these devices are slated to be made by robots in the very near future. 
Page 1 / 2   >   >>
More Blogs from Jonestown
Fixed 5G will be good for Verizon and friends, but it surely doesn't appear to be anything like a wireless revolution. Yet!
5G innovations such as network slicing could be a good way for operators to test drive services in a world where net neutrality has been neutralized.
Bidding on Qualcomm could give Intel a 5G fillip and possibly more importantly an instant 4G boost.
Sprint, T-Mobile and Verizon eye NB-IoT in 2018, while AT&T is full-bore on Cat M for now.
Forget 5G! For early adopters, Gigabit LTE will be coming of age in the US at Mobile World Congress in San Francisco this month.
Featured Video
From The Founder
Light Reading founder Steve Saunders grills Cisco's Roland Acra on how he's bringing automation to life inside the data center.
Flash Poll
Upcoming Live Events
February 26-28, 2018, Santa Clara Convention Center, CA
March 20-22, 2018, Denver Marriott Tech Center
April 4, 2018, The Westin Dallas Downtown, Dallas
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
Infographics
SmartNICs aren't just about achieving scale. They also have a major impact in reducing CAPEX and OPEX requirements.
Hot Topics
Project AirGig Goes Down to Georgia
Dan Jones, Mobile Editor, 12/13/2017
Here's Pai in Your Eye
Alan Breznick, Cable/Video Practice Leader, Light Reading, 12/11/2017
Verizon's New Fios TV Is No More
Mari Silbey, Senior Editor, Cable/Video, 12/12/2017
Ericsson & Samsung to Supply Verizon With Fixed 5G Gear
Dan Jones, Mobile Editor, 12/11/2017
Juniper Turns Contrail Into a Platform for Multicloud
Craig Matsumoto, Editor-in-Chief, Light Reading, 12/12/2017
Animals with Phones
Don't Fall Asleep on the Job! Click Here
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed