5G Firms Still Face Trump Tariffs

Mike Dano
8/13/2019
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President Trump will delay imposing 10% tariffs on some Chinese-made goods and consumer electronics, including cell phones, until December 15.

But this doesn't mean the companies building 5G networks have sidestepped the US trade war with China completely.

FCC Commissioner Jessica Rosenworcel said tariffs on cell phones have been delayed, but 5G antennas, semiconductors and routers already face a 25% tariff that went into effect in May.

"We need a thoughtful way to build a digital future. This mix of taxes on consumers & networks is not it," she wrote.

Network operators ranging from Verizon to Sprint are in the process of switching on 5G networks around the country and are currently offering a handful of expensive 5G phones for those networks. These companies hope to expand 5G coverage, as well as release less expensive 5G phones, in the coming months.

Those plans could run up against Trump's tariffs. The United States Trade Representative (USTR) today said it is moving forward with plans to impose a 10% tariff on $300 billion in Chinese goods, set to take effect September 1. The USTR said it would delay until December 15 the imposition of tariffs on select goods including "cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing."

The agency also said "certain products" would be removed from the list of products facing tariffs altogether "based on health, safety, national security and other factors." The agency said it would publish the full list of those items later today.

Today's news served to cheer investors. Shares in companies such as Apple, Qualcomm, Corning and others were up following the USTR's announcement, noted CNBC. Apple specifically is expected to release a new iPhone in September, and company officials have warned that any tariffs on its products could be passed on to American consumers in the form of bigger price tags.

But, as The Hill noted, the situation could well stretch far beyond the cost of a new phone during the upcoming holiday shopping season. The publication reported that economists at Bank of America, Goldman Sachs and Moody's Analytics have warned in the past week that the chance of a recession is rising in part due to Trump's trade policy.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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