back to article America-China tariff tiff could flip the switch on Cisco price hikes

Cisco chief exec Chuck Robbins has warned that a US-China trade war over tariffs could lead to price rises for Switchzilla’s networking kit. "The tariffs that are suggested are across a lot of our core networking products, so it's fairly significant," Chuck Robbins told American telly station CNBC during an interview. Most of …

  1. Eduard Coli

    No worries, thanks to Cisco having all of its kit built in the the PRC there are lots of Chinese copies that are less expensive and even running current IOS.

  2. Eduard Coli
    Devil

    No worries, thanks to Cisco having all of its kit built in the the PRC there are lots of Chinese copies that are less expensive and even running current IOS.

    1. Yet Another Anonymous coward Silver badge

      But the Chinese knock-off stuff doesn't have the correct official NSA backdoors

    2. Steve K Silver badge

      Is your second post another Chinese copy....? ;-)

  3. LeahroyNake Bronze badge

    nope

    'And lest we forget, UK channel customers of Cisco pay for the kit in US dollars.'

    It's easier to buy the state hacked stuff straight from the factory and miss out the middle man / Cisco. Or just do it in software with cheap routers and switches... Ummm yeah I see where you are going.

    1. bombastic bob Silver badge
      Devil

      Re: nope

      I have to wonder what percent of the total cost of a Cisco router is affected by this...

      But it _DOES_ suggest that relying on "single source" for parts is _BAD_ [even if it's cheap].

      I've seen an illegal knockoff built in China before. An antenna company I worked at had an antenna that was potted in plastic. Cleverly they had etched the company logo into the antenna design (removing it would affect antenna performance). The knockoff had the same antenna logo on the copper, underneath the plastic, but it was kinda 'rough' like they'd used an X ray to clone it. The antennas WERE being made in China at that time, and so the existence of knockoffs were COMPLETELY undeniable. And this was around 10 years ago.

      I suggest that companies in the UK get some 'lights out' factories built. As long as it's cheaper to hire "pile of bodies" in China to work for slave wages to build our stuff, companies will do that. When it becomes economically viable to NOT do that, i.e. with robots doing the tedious manual labo[u]r, and a lack of tarriffs, shorter lead times, cheaper shipping costs, etc. to go with it, using LOCAL sources for at least PART of the product will make a whole lot more sense.

      I doubt China's chip foundries are any better than those in other places in the world, including Japan, UK, and USA, just cheaper cost. They've actually done things pretty smart, trying to get the entire supply chain 'over there' so they can reduce costs. Inventory is expensive. So having all of that 'in one place' shortens lead times and maximizes supply-chain flexibility.

      On the other hand, what they're doing with their trade and IP policies is NOT smart. Angering your customers is bad policy. IP theft angers customers. 'Predatory practices' angers customers. 'Retaliatory tarriffs' angers customers as well. But the government ultimately runs the show, and they're not capitalists, they're neo-communists, and so their thinking process is tainted by their politics.

      Maybe a clue-bat is required?

      1. Anonymous Coward
        Devil

        Re: nope

        There are plenty of alternatives to Cisco.. maybe the Cisco-Fanbois-Network-Team will now broaden their horizons.. Such as Dell, HP, Netgear.. Oh maybe not!

        1. Serg
          Mushroom

          Re: nope

          LOL, Netgear...

      2. phuzz Silver badge

        Re: nope

        China don't just have the benefit of cheap labour, they've got cheap everything else, including raw materials, and power.

        Plus, because everybody is building stuff in China, there's also the benefits of an easily accessible supply chain. After all, you might build your router in the UK, but you're still probably going to end up buying the screws for the motherboard, or the fans, or the cables etc. from China.

      3. Spazturtle Silver badge

        Re: nope

        In the UK and US when it comes to fire safety in building the priority is keeping as many people alive as possible, not saving the building. So things like halon gas fire suppression need to be disable when anyone is in the part of the building with fire suppression as they are fatal if activated. In China this is not the case, you can design your factory so that the fire suppression is design to save the equipment even if it means putting lives at risk.

        Now if you are building a $30 billion chip foundry which country sounds like the more attractive place to build in?

        1. Anonymous Coward
          Anonymous Coward

          Re: nope

          Christ I hope you wouldn't find any Halon still around in the UK it went out with the ark

        2. Anonymous Coward
          Anonymous Coward

          Re: nope

          The main issue with semiconductor fabs is they tend to work with a lot of fairly nasty chemicals (i.e. trichloroethylene and hydrofluoric acid).

          Most first world countries regulate the chemicals heavily due to their dangers to both employees and the environment. Other countries have a less risk averse view on those same chemicals which in turn significantly reduces production costs.

          If you are producing high margin chips (i.e. Intel/AMD/TSMC), you can afford the higher production costs in the US. If you are using cheap, high volume components, you will likely struggle to get them outside of Asian producers.

  4. Oor Nonny-Muss

    "And lest we forget, UK channel customers of Cisco pay for the kit in US dollars."

    I paid for a Zambian beer in Vic Falls, Zimbabwe with US dollars, entirely free of any tariff based interference of US Customs... Presumably Cisco don't ship all of their gear via the US so it shouldn't attract the punitive Orangeman tax.

    1. Andy The Hat Silver badge

      I can't see how a US border import tariff would be applied if the export was to the European market ... or are we also part of the hair monster's dominion?

      1. Spazturtle Silver badge

        A big ship comes into port with a massive shipment of routers and unloads it, Cisco pay tariffs on all of it. A smaller boat then comes and pick up some of the shipment and sails to Europe with it. After the feds do their paperwork Cisco gets a refund for the amount that didn't enter the US market.

        So there will be a slight increase in prices due to the lost opportunity cost caused by not having the money imminently, but not as much as the tariff would raise them by.

  5. Trollslayer Silver badge
    Mushroom

    COCOM strikes again

    Remember the Reagan era?

    COCOM was supposed to be about security but it was about denying people important components.

    Is anyone surprised when it turned out to include basic logic devices? I ended buying Japanese parts and US equipment manufacturers of many kinds had trouble exporting their products.

  6. sanmigueelbeer Silver badge
    Thumb Down

    Cisco chief exec Chuck Robbins has warned that a US-China trade war over tariffs could lead to price rises for Switchzilla’s networking kit.

    Suuuure, Chuck. Sure. Just another "reason" to raise the prices while the quality sinks.

  7. cweinhold

    price hikes are here

    Cisco jacked prices on 2500 products today by 5-10%

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