Security Business

JUN 2018

Find news and information for the executive corporate security director, CSO, facility manager and assets protection manager on issues of policy, products, incidents, risk management, threat assessments and preparedness.

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June 2018 / Security Dealer & Integrator 31 he past few months have certainly seen its fair share of twists and turns when it comes to the looming "trade war" between the United States and China; in fact, on May 29, President Trump pivoted from a sort of temporary "cease-fire" to announce that the United States will indeed impose a 25-percent tariff on "$50 billion of goods imported from China containing industrially significant technology." How proposed tariffs on Chinese technologies and parts could potentially impact security integrators, vendors and distributors By Paul Rothman and Steve Surfaro • Media conversion and solid state media storage; • LED lighting; • Video monitors and displays; • Touchscreens; and • Helicopter parts (for aerial drones). "e inclusion of many of these products will (increase) the cost of key components needed to manufacture or integrate security systems," Don Erickson, CEO of the Security Industry Association (SIA), wrote in a formal letter of opposition that was sent to the federal government. "In many cases, there are few if any realistic alternative sources that can be pursued without significant supply chain disruption." What would happen to our indus- try if all of these products coming from China cost 25 percent more than they do today? "I can tell you for a fact that security integrators are not going to eat the 25 T percent," says Bill Bozeman, President and CEO of the PSA Security Net- work of integrators. "ey will have to pass it through to the end-user in 95 percent of the cases. Even for the 5 percent who might eat those costs, it will only be a strategic move to gain market share – a loss leader type of mentality that some integrators and manufacturers utilize. "e big question is, if that's the case, will it impact sales growth," Bozeman asks. "Products are only a certain percentage of the whole pack- age, but if things go up, for example, 9-10 percent, will it have an impact on sales as things get more expensive?" SIA maintains that any such threat to the costs of security products and components could have potentially dire repercussions. "Imposition of tariffs on these products would have a significant negative impact on our industry's ability to export and continue to grow in the United States," Erickson wrote, adding that the tariffs would "put jobs at risk for U.S. workers, and will make it more difficult for our members to respond to U.S. customer demand – an issue which, for an industry striv- ing to provide the most effective security and life safety solutions, has consequences that go well beyond the bottom line." e White House says the final list of covered imports will be announced by June 15; however, thanks to a pre- viously published list of products and technologies already targeted for pro- posed tariffs (outlined in great detail at Press/Releases/301FRN.pdf ) the secu- rity industry has a good indication of what will appear on the final list. If the tariffs are eventually adopted, it will have a ripple effect across the security industry – with major effects on dealers, integrators, vendors and distributors. SD&I has delved deeply into this proposed tariff list and come up with the following list of affected products/product categories: • Video cameras (circuit boards/inter- nal parts and lenses); • Batteries and UPS devices; • Fiber optic cable; • Coaxial connectors;

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