Arthur J. Villasanta – Fourth Estate Contributor
San Jose, CA, United States (4E) – Cisco Systems, Inc, the world’s largest networking company, will have to raise prices of its already expensive products as a result of the ongoing trade war between the United States and China,
Cisco CEO and chairman Chuck Robbins said his company will have to deal with the fallout from the trade war by passing on higher prices to its customers. He said the proposed tariffs “are across a lot of our core networking products, so it’s fairly significant.”
He said Cisco will have to contend with the harmful effect of the trade war through pricing, just like it’s done in the past. Most companies will turn to price increases to cope with the higher costs imposed by new tariffs, he said. Higher prices carry a cost and most tech firms like Cisco will just have to deal with this fallout.
Robbins said Cisco is optimizing its global supply chain to cut costs where it can while increasing efficiencies. It’s also had talks with the Trump administration to help it understand the implications of tariffs on many of Cisco’s products.
Cisco develops, manufactures and sells networking hardware, telecommunications equipment and other high-technology services and products worldwide. It also has a massive presence in Internet of Things (IoT) technologies.
Cisco, Dell, Juniper Networks and Hewlett Packard Enterprise recently issued a last-minute appeal to the administration to remove important products from inclusion in a potential new round of tariffs. The four tech giants wrote that tariffs on networking equipment will also increase prices for consumers and delay investments.
The letter was addressed to U.S. Trade Representative Robert Lighthizer, an advocate of tougher sanctions on China. In this letter, the four firms also tried to convince the administration the potential damage that tariffs will have on research and development investments. Robbins believes the White House is listening to the concerns raised by the four tech giants.
Robbins hopes the U.S. and China can come to a favorable conclusion before the next round of tariffs is implemented, possibly as early as this month. He also said there needs to be a global basis where there is fair and open trade.
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