Tuesday , November 13, 2018

Proposed Tariffs on Chinese Goods Draw More Opposition From the Payments Industry

The escalating U.S.-China trade war is generating calls for a truce from the payments industry. Most recently, the ATM Industry Association announced its opposition to planned U.S. tariffs on Chinese goods, calling them a “threat to business.”

ATMIA members are expected to testify at a tariff hearing next week in Washington, D.C. A pending U.S. government proposal would impose duties of 25% on Chinese-made ATM parts and components, and 10% on fully-assembled machines, according to David N. Tente, executive director for the U.S. and Americas at the Sioux Falls, S.D.-based trade association.

Payments-industry groups and those from other industries have been monitoring the tariff situation ever since President Donald Trump began challenging China, Canada, and the European Union about trade issues earlier this year. The Electronic Transactions Association joined more than 100 other trade groups that sent a letter to Congress in April expressing their “deep concern” about planned tariffs. The ETA said duties could make life more expensive for merchant acquirers and others that buy point-of-sale terminals and related payment hardware from Chinese manufacturers.

Tente: “We support free trade.”

Now the ATM industry is growing increasingly concerned about the Trump Administration’s most recent tariff proposals. But no one has precise numbers on how much hardware the industry buys from China, according to Tente.

“It’s a little hard to know exactly how expensive it would be,” Tente tells Digital Transactions News. But he adds: “It just appears the further we got into it, the greater impact there is.”

What is clear is that U.S. ATM manufacturers and related suppliers buy quite a few components from China. Only one Chinese ATM manufacturer, GRGBanking, sells complete machines in the United States, according to Tente. GRG’s distributor is Mount Prospect, Ill.-based Cummins Allison Corp., a hardware provider to the banking industry. Deployers of lower-cost ATMs for convenience stores and malls likely would be hit the hardest, Tente predicts.

The Office of United States Trade Representative (USTR), an arm of the White House, has scheduled a hearing on the tariff proposals for Aug. 20-23 in Washington. The USTR already has received nearly 1,100 comments on its proposals.

The Washington-based ETA said in a filing with the USTR that it plans to testify at the hearing. A range of telecommunications components and other electronic equipment used in the payments industry would be subject to new duties, according to the filing.

Many U.S. companies, including payments firms, have complained for years that China requires technology transfers and imposes other conditions that make it difficult for them to do business in the world’s most populous country. But new tariffs “would not be practicable or effective to curb or eliminate the acts, policies, and practices of China related to technology transfer, intellectual property and innovation” cited by the USTR, according to the ETA’s filing.

Says Tente: “We’re not selectively opposing this tariff, we’re opposing all tariffs. We support free trade.”

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