Michael Dell On Trump China Tariffs: 'I'm Not Going To Say My Dog Ate My Homework'


Dell Technologies founder and CEO Michael Dell said his company is "making adjustments" in preparation for China tariffs and the possibility of increasing prices on Dell products.

When asked by CRN if he expects the tariffs to have an increase on costs, Dell said, "Well there's some, and we, like every company, are making adjustments to our supply chain. In some cases, if the input costs are changing, obviously we'll reflect those through our products."

Dell said he doesn't know what potential prices increases will emerge but said “we are prepared and continuing to adjust to make sure we can meet the commitments to our partners [and] to our customers."

[Related: Partners: Trump China Tariffs To Hit Customers As Cisco Price Increases 10%]

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Looking ahead, Dell is optimistic that the U.S. tariffs on goods made in China will not impact his company's optimistic outlook for digital transformation sales in 2019.

"I'd say it's a risk, but I'm not going to say, ‘My dog ate my homework,’" said Dell. "Our business is doing really well, and we're gaining share. If there are some changes in the global trade landscape, that doesn't slow down the urgency and priority for digital transformation. Customers will face those opportunities and challenges that go along with digital transformation, irrespective of what happens in the trade discussions."

The largest networking vendors in the world are hitting customers with additional charges in response to the U.S. tariffs on goods made in China.

CRN reported that Cisco is in increasing prices on 2,850 individual SKUs, adding a 10 percent pass-through on every SKU manufactured in China. Juniper Networks is adding an additional 3.5 percent charge on products that contain parts from China.

Solution providers said that customers will pay for the increase in costs created by the tariffs.

"Unfortunately, those increases will get passed on to the customer in most cases," said Craig Manahan, practice manager of data center infrastructure for Cincinnati-based RoundTower Technologies, which partners with Cisco and Dell. "I would imagine that we will see some increases from almost all vendors because it's going to affect everyone at some level. There are so many components made in China that when their cost goes up, the price for us is going to go up too. Hopefully, it's not a long-term impact, but who knows?"

In August, Juniper, Cisco and Hewlett Packard Enterprise and Dell sent a letter to U.S. Trade Representative Robert Lighthizer, urging him to hold off on imposing tariffs on China.

"If the USTR were to impose a 10 [percent to] 25 percent additional duty on networking products and accessories, it would cause broad, disproportionate economic harm to U.S. interests, including our companies and U.S. workers, our customers, U.S. consumers and broader U.S. economic and strategic priorities," the letter to Lighthizer said.

Michael Murphy, president of Nanuet, N.Y.-based solution provider VirtuIT, said the tariffs colud derail some deals for the channel in the near term.

"In organizations where budgets are tight, especially public sector, it could stand to derail or slow down some deals," said Murphy. "Overall, the IT industry is used to price fluctuation such as disk drives and memory—those are market commodities that do go up and down. We're conformable with telling customers, 'Hey, you better get [your purchase order] in by this quarter because disks are going to go up or memory is going to go up.' It will be a little bit bumpy with the tariffs, but overall the industry will absorb it."