Security Business

JUN 2019

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10 Security Business / / June 2019 SECURITY WATCH BY STEVE SURFARO, SECURITY INDUSTRY ASSOCIATION Top Story Escalating Trade War to Impact Security Businesses Solar power systems, other widely used industry components added to tariff list Following months of talks between U.S. and Chinese negotiators that many hoped would bring an end to the ongoing trade dispute between the two nations, the Trump administration recently announced its intention to raise tariffs from 10 percent to 25 percent on $200 billion of products from China. In retaliation, the Chinese government said it would levy tariffs on $60 billion worth of American imports, which would range from 5 to 25 percent. This latest round of tariffs will not only mean higher prices for American consumers, but will also significantly impact industries, including security. Although the impact of the new “Chapter 99” is limited, we first need to understand what is subject to the additional 25-percent duty. Under this implementing modification summarized by the Office of the United States Trade Representative (USTR), Chinese products covered by the previous Sept. 2018 action that were exported prior to May 10, 2019, are not subject to the additional duty of 25 percent – as long as such products enter the United States prior to June 1, 2019. Such products remain subject to the additional duty of 10 percent for a transitional period before June 1. The covered products of China that are entered into the United States on or after June 1 are subject to the 25 percent rate of additional duty. Here is a look at some of the affected products, in order from high to low impact (note that the official USTR document, USTR-2018-0005, is 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 A range of solar panels and solar systems used in residential, commercial applications are cited. Security lights and “off-grid” camera and communications systems are specified in a very complex manner in the Chapter 99 document (as follows), yet they still refer to past tariff schedules. Since inventory levels may not be high and a small to mid-sized security business is not able to absorb the additional costs in an outright sale or leased solar system, these tariffs will most likely be passed on to the end-user. Here are the specifics: • 10 to 60-watt rectangular solar panels: To put this in perspective, and in an ideal case, a single 50-watt solar panel would be typically used to power five lights of 15 Watts each for four hours every day in a geographic location receiving complete sunshine six hours each day. • 1-watt solar panels that are incorporated into nightlights and use rechargeable batteries. • 2-watt solar panels incorporated into daylight dimmers that may use rechargeable batteries. • “Off-grid” and portable crystalline silicon photovoltaic panels” (“CSPV panels”): Whether in a foldable case or in rigid form containing a glass cover, these are typically used in portable security camera and communications systems. Low Impact The following are additional goods used in security businesses, either as a service or solution support, that stand to be impacted: • Light emitting diode (LED) motion-activated security lantern kits, of a kind used for exterior lighting” (9902.17.51). • Oscilloscopes, digital multimeters, LAN network analyzers, signal generators, and Optical and wired Time Domain Reflectometers (OTDR), (9902.17.29 - 9902.17.41). • Projection lenses typically used in LCD projection systems (9902.17.15 - 9902.17.16). ■ » 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, video, and first responder technologies.Follow him on Twitter, @stevesurf. The continuing U.S.-China Trade War has seen more products added to the tariff list that could impact the security industry. ©BigStock

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