Consumer Tech Asks at Opening Day of Hearings to Be Shielded From List 4 Tariffs
IRobot CEO Colin Angle has firsthand knowledge of the intellectual property abuses Chinese companies engage in, he testified Monday on the opening day of Trump administration hearings on the proposed List 4 Section 301 tariffs on Chinese imports. But Angle asked the administration not to impose tariffs on the robotic goods it sources from China because his firm, which employs 700 in the U.S., is satisfied with China as a manufacturing platform.
Angle, who said iRobot has more than 80 percent of the consumer robot market in the U.S., said his company won a patent violation case in October, which meant Chinese factories can't export those goods to the U.S. IRobot was the victim of cyberattacks that resulted in IP theft, and two Chinese citizens were indicted for the crime, said Angle.
"Moving production to the U.S. would increase our cost of goods sold by 60 percent," Angle said. The Roomba, iRobot's flagship product, has had List 3 tariffs imposed on it since last summer, he said. The company absorbed the cost through December but then had to raise prices, he said. If 25 percent tariffs are levied on robotic mops -- and the soon-to-launch robotic lawnmower -- it will raise prices and slow adoption, he said.
Angle was one of a half-dozen consumer tech witnesses to testify Monday, all asking the Office of the U.S. Trade Representative that their products be removed from List 4. In several cases, their goods were targeted on earlier lists but removed after the industries successfully argued that the tariffs would hurt American companies more than they would convince China to change its practices.
Element Electronics General Counsel David Baer said when the highest value input of TV assembly -- the LCD panel -- was added to the Miscellaneous Tariff Bill (see 1904260021), that allowed Element's Winnsboro, South Carolina, facility to add 100 new jobs. That shifted the tariff from 4.5 percent to zero, he said.
If the tariff now goes to 25 percent, Element will stop importing LCD panels after July, said Baer. They're available only from China, he said. So once the inventory is gone, Element will close in South Carolina and do all its assembly in Mexico, he said. NPD places Element among the top five brands in U.S. TV unit share, mainly through the high-volume product it sells to Walmart, Costco and Target. "We alone are working to reshore an industry that left decades ago," said Baer. "You have to fix this unintended consequence."
Best Buy Chief Merchandising Officer Jason Bonfig asked that smartphones, laptops, computers, tablets, TVs, gaming consoles and computer monitors be spared the List 4 tariffs. "U.S. consumers have largely been shielded" so far, he said. Bonfig said brands have been moving manufacturing out of China since Section 301 enforcement efforts began, but it's a multiyear effort to find new sourcing, and that "cannot be done faster than it’s already going," he said.