[New Blog Post] GR And Tariff WG’s
The Trump administration claims to advocate for small businesses, however; the imposition of an additional 25% tariff against cash registers and POS terminals (“devices”) could have a detrimental impact on those same businesses. The tariff has been proposed as a response to China’s growing use of discriminatory trade and investment policies which place innovative U.S. companies that rely on intellectual property assets at a competitive disadvantage.
The tariffs would dramatically increase the price of devices in the United States, which could have negative impact on consumers as well as small businesses. This would result in higher prices and force retailers to not purchase devices, which could result in longer check out lines. The tariff could also hurt small businesses by increasing the cost of devices at the very same time businesses are required to upgrade POS terminals in order to meet EMV compliance requirements. Moreover, the tariff would likely have a negligible impact on China, which manufactures at least 95% of devices, because the devices shipped to the U.S. represent less than 10% of worldwide market share. A downturn in sales to the U.S. would likely be absorbed elsewhere in the world.
The tariff would cause pain to U.S. consumers and small businesses, while having a small impact encouraging China to change its discriminatory trade and investment policies. Although this should be a priority of the administration, the tariff is not the correct response. Hopefully the administration can be persuaded from implementing the tariff and hurting the very businesses for which it claims to advocate.
-Josh Herndon, Attorney, Global Legal Law Firm