Tariffs on China cause new data center equipment prices to increase

As if the end of the year doesn’t present enough challenges for IT professionals, now there is the added concern coming from the Trump administration regarding the tariffs that were imposed on China back on Sept. 24.

Companies including Cisco, Dell, HPE, and Juniper Networks all called for networking and server equipment to be dropped from the tariff regulations, but they were unable to persuade the U.S. government to do that.

“By raising the cost of networking products, the proposed duties would impede the development and adoption of cloud-based services and infrastructure,” the group told trade regulators before the tariff was imposed, according to Reuters.

Once the tariffs went into effect, many of these original equipment manufacturers (OEMs) were quick to implement price increases on their offerings, and unfortunately those increases are being passed onto consumers.

Cisco slapped a 15 percent price increase on several of their products on pretty much day one. Juniper Networks put a 3.5 percent increase in place on networking products and is scheduled to bump that up on Jan. 1, 2019. And Arista Networks started a 3.3 percent increase on all hardware products starting Oct. 1. Those are just a few of the OEMs that have changed their pricing.

Even if your organization can make it through the end of the year unscathed, there’s a bigger threat looming. The current 10 percent tariff imposed by the Trump administration is scheduled to jump to 25 percent in January 2019, leading to the likelihood of even higher costs being passed onto the customer.

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