US security players react to the new tariffs; SIA issues letter asking for exemptions

This is an updated version of the original article published in early April.
 
Earlier this month, US President Donald Trump announced reciprocal tariffs on all imports to the United States. Already the announcement has triggered massive stock selloffs across the globe as investors fret over the potential negative impact of these tariffs.

Yet as it turns out, it’s not just investors who are panicking – US security players are expressing their unease towards the tariffs are well. Notably, the US Security Industry Association (SIA) on April 22 issued a letter to the US government asking that certain imported security hardware, equipment and components be exempted from the tariffs to ensure that US security companies can continue to provide reliable and affordable products and solutions to their customers.
 
A major theme of President Trump’s second term is to use tariffs to rectify what he views as unfair trade practices that have resulted in huge US trade deficits. To that end, the U.S. has announced tariffs on Canadian and Mexican imports, except goods under the USMCA agreement. It has also imposed a 25 percent tariff on steel, aluminum, and automotive products imported from all countries.
 
Then, on April 2, the U.S. announced to tariff all imports to the U.S. at a minimum of ten percent, while 57 nations and entities are subject to higher rates ranging from 11 to 50 percent. Then, a few days later, amid a crash of the US stock, bond and currency markets, Trump has put most of these tariffs on hold for 90 days pending further negotiations. Tariffs against Chinese imports however were increased to 245 percent. China has responded in kind.

SIA: Companies put under ‘enormous strain’

 
While the impact of the tariffs on the US security industry remains unclear, security players in the U.S. are already expressing their concerns. In particular, SIA sent a letter to US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick, dated April 22, voicing these concerns.
 
In the letter, SIA maintains that “the U.S. is the largest market worldwide for security products, where the security industry contributes over US$430 billion to the economy and provides more than 2.1 million jobs in the United States.” The association then stressed that when faced with an uncertain and volatile international trade environment, “companies are put under enormous strain as they struggle to ensure that they can continue to operate while facing increased costs along the supply chain,” adding that “the (Trump) Administration’s global tariff policies do not adequately consider the global value chain for the development and manufacturing of security products and security systems integration.”
 
Expressing its “steadfast view that US trade policy should accelerate further growth and contribute to a competitive and innovative business climate,” SIA is requesting that certain imported security hardware and components be exempted.
 
“We are encouraged to see that the President maintains his own authority to ‘further modify the Harmonized Tariff Schedule of the United States (HTSUS) to decrease or limit in scope the duties imposed’ … therefore, we respectfully request that, at the bare minimum, the specific HTSUS subheadings … be subject to a secondary rate of duty that does not include any additionally imposed tariffs,” the letter said. These include the following:
 
•    Alarm systems
•    Access control
•    Camera systems
•    Communications equipment and systems
•    Identity management solutions
•    Security-related uncrewed systems
•    Robotics
•    A range of other cutting-edge security solutions
 
“SIA will continue to advocate for this exemption to preserve some stability in the current international trading environment for the industry at large. SIA will continue to anonymously survey the industry and measure how tariffs are affecting our manufacturers and integrators, and we encourage you to reach out to our government relations team with any impact statements that you would like to share,” the organization said in a separate statement.
 
The impact of the new tariffs remains to be seen. However, if history is any guide, tariffs lead to inflation and economic stagnation, creating a lose-lose situation for all. The effects of the tariffs on the security industry are indeed something worth observing over the next couple of months.