Nortek Security & Control is a leading manufacturer and OEM supplier of intelligent access control, security, personal wellness and home automation products. Leveraging extensive design and engineering capabilities and more than 50 years of innovation, Linear supplies its technology to leading distributors, retailers, service providers and manufacturers.
Whether in the studio or live on stage, Lagudi relies on the Furman® P-1800 to deliver clear, unwavering power supply while touring the globe.
CARLSBAD, CALIFORNIA — Machine Head sound engineer Steve Lagudi is power hungry — but not in the traditional sense. Lagudi’s thirst for power is all about delivering unwavering sound, clarity and punch, for the bands he does the sound engineering for, both live and in the studio.
To quench his thirst and make sure all that power is delivered on a reliable and consistent basis, Lagudi relies on Furman® power solutions by Nortek Security & Control.
“Power is everything, especially during the live show work I do,” Lagudi said. “The Furman P-1800 AR line conditioner is at the top of my rack as the one product that’s out there that is going to take care of my power every time – and that’s everything in this business.”
Lagudi has 20-years as a sound engineer working with artists such as Exodus, Testament, God Forbid, Shadows Fall, Ill Nino as well as the band he’s currently on tour with in Europe, Machine Head. That’s an impressive list of power-driven rock bands, all with a very guitar heavy blend.
“People don’t realize how much the equipment sound engineers work with rely on proper voltage, and that’s particularly true with guitar amplifiers,” Lagudi explained. “And to get them delivering the sound I need, whether live or in the studio, the head has to be running optimally. You can do whatever you want to the actual amp but if you don’t have the proper power that it needs to run at, that amp will sound awful.”
The Furman P-1800 accepts input voltages over a wide AC voltage range and transforms it to a constant output of 120V, + 5V.
“The P-1800 is so valuable to have on tour as I’m working with very guitar-driven music, and now that I’m on tour in Europe with Machine Head, we’re seeing different power requirements – voltages from 210 to 250 volts,” he said. “That’s a huge swing in variance from country to country and venue to venue and that will affect guitar amplifiers dramatically and how they respond and the P-1800 handles all this with no problems.”
Laugudi uses a step-down transformer when the band tours overseas to cut the voltage in half but the voltage still fluctuates – 210vac=105vac – and the P-1800 can handle 90vac to 140vac.
The P-1800 AR is a full-featured power conditioner that filters and purifies AC power, reducing line noise and ensuring optimum performance. Using Furman’s Linear Filtering Technology (LiFT) that is designed to counter electrical noise that distorts low-frequency information, the P-1800 helps significantly lower the noise floor, thereby uncovering this important low-level information.
It has been five years since a 2013 North American tour introduced Machine Head to what Furman and their power equipment are all about. As Lagudi explained it, “We were using a generator to supply power to the PA and backline and when the band was playing I could see the voltage going down and all the memory in our custom MIDI switching systems would dump causing us to lose all the settings every show.”
Lagudi made an emergency call to Furman and six P-1800 AR’s were immediately shipped out and. Lagudi and Machine Head have been using Furman ever since.
“The P-1800 is just a great piece of insurance that I can put in my racks with confidence,” he said. “And it doesn’t matter if it’s live or in studio because no matter what, gear has to work as time is money in this business. Granted, when you’re live there’s that extra pressure that the equipment has to work, but when you’re in a studio with a client or even more importantly during the creative process, when ideas are just pouring out, you can’t be worrying that the equipment in your studio might not work.”
Furman® is legendary for developing award-winning, innovative power management products. Furman power and energy management products give audio/video systems the pure, noise-free power they need for superlative performance while protecting them from damage caused by power surges and lightning. The brand addresses all major electronic markets, including professional audio and video, the music industry, broadcasting, audio/video recording, office equipment and home theater. More information is available at www.furmanpower.com.
About Nortek Security & Control
Nortek Security & Control LLC (NSC) is a global leader in smart connected devices and systems for residential, security, access control, and digital health markets. NSC and its partners have deployed more than 5 million connected systems and over 25 million security and home control sensors and peripherals. Through its family of brands including 2GIG®, ELAN®, GoControl®, Linear®, Mighty Mule® and Numera®, NSC designs solutions for security dealers, technology integrators, national telecoms, big box retailers, OEM partners, service providers, and consumers. Headquartered in Carlsbad, California, NSC has over 50 years of innovation and is dedicated to addressing the lifestyle and business needs of millions of customers every day.
Any other brand names and product names mentioned herein may be the trademarks, tradenames, service marks or registered trademarks of their respective owners.
Over the weekend, the US and People’s Republic of China leaders agreed to a temporary truce in the ongoing trade dispute that has included unprecedented tariffs imposed by the US Government on many classifications of products imported from China. This weekend’s agreement places a 90-day delay on the round of 25% tariffs that were scheduled to go into effect on January 1st, impacting many products in our categories of Security and Control that were already affected with a 10% tariff. The announcement was short on detail, but the additional 15% tariff is on hold and discussions between the US and China representatives are set to begin with the goal of concluding within 90 days.
While we are optimistic about this news, this is not a reversal of the tariffs already imposed on China imports. The Nortek Security & Control pricing currently in place is the price that will be in effect on January 1; and new price increases related to the additional 15% January 1 Tariffs previously announced to distributors and dealers have been put on hold. Meanwhile, we are not slowing down at all in our efforts to take all appropriate steps to minimize the impact of the tariffs on our customers. In fact, we have a team in Washington, DC this week meeting with key leaders to press our point opposing these tariffs as unnecessary burdens on manufacturers like NSC.
All of us at NSC absolutely believe that our customers and end-users deserve the best value for their money; these tariffs bring no real value and are nothing more than an unnecessary tax that is a burden on businesses like ours that own manufacturing facilities in China. We will do everything we can to communicate to you in a clear and timely manner related to the tariffs and their impact on our and your business.
We enjoyed an exceptional CEDIA 2018 experience and thank everyone who attended our presentations or joined us at the booth. All of us at Nortek Security & Control always appreciate the opportunity at CEDIA to meet with so many custom integrators at once and learn what more we can do to help your business.
Ambassador Robert E. Lighthizer
U.S. Trade Representative
Office of the United States Trade Representative
600 17th Street NW
Washington, DC 20508
Re: Consumer Technology Association
Public Comment on Federal Register Docket Number USTR-2018-0018
Dear Ambassador Lighthizer:
The Consumer Technology Association (CTA) hereby submits its comments to the Office of the United States Trade Representative (USTR) on the additional proposed tariffs pursuant to Annex C of USTR’s Notice of June 20, 2018 (Annex C) issued as part of the follow-up actions from the Section 301 Investigation against China’s discriminatory acts, practices and policies regarding intellectual property.
CTA appreciates the administration’s removal of various items from its original list of proposed tariffs in response to concerns expressed by CTA and other commenters. CTA also appreciates that the administration accounted for the concerns of our member companies about China’s practices, submitted in CTA’s comments to USTR on the Section 301 Investigation of China.
However, as stated in our earlier submissions and testimony regarding the investigation and proposed tariffs, CTA remains categorically opposed to the use of tariffs to address inequity in the trade relationship with China. Tariffs raise prices for American manufacturers and consumers, generate business uncertainty, and create long-term negative consequences to the U.S. economy.
Mirroring our comments on the original list of proposed tariffs, CTA believes that tariffs on the additional products listed in Annex C will not reduce China’s harmful trade practices and will instead do damage to U.S. interests. CTA provides specific comments on 54 line items, identified in Appendix A, which will cause disproportionate harm to our member companies. CTA requests those items be removed from the Annex C proposed list. The import value of Chinese products under these codes amounts to $9.8 billion (2017).
This submission proceeds as follows: Section I provides background on CTA and our member companies; Section II outlines how the proposed tariffs negatively impact CTA member companies; Section III explains the proposed tariffs will be ineffective to obtain elimination of China’s acts, policies and practices; Section IV explains the proposed tariffs will further cause disproportionate harm to U.S. businesses and consumers; and Section V provides our conclusion and recommendation. Appendix A identifies each HTSUS code for which CTA requests removal from the list of products subject to additional duties, as well as comments from CTA and our member companies providing our rationale as to why increased tariffs on that product will be ineffective to achieve USTR’s stated policy goals and cause disproportionate harm to U.S. interests.
Attachment 1 provides, for ease of reference, CTA’s prior submission to USTR on its April 6, 2018 Federal Register notice requesting comments on the original list of tariffs proposed as a result of the Section 301 Investigation. Attachment 2 provides, for ease of reference, CTA’s prior submission to USTR on its August 24, 2017 Federal Register notice requesting comments on China’s acts, policies and procedures related to technology transfer, intellectual property. Attachment 3 presents a second joint CTA/NRF study entitled, Tariffs on Imports from China: Estimated Impacts on the U.S. Economy.
Background on Consumer Technology Association
CTA is the trade association representing the $351 billion U.S. consumer technology industry, which supports more than 15 million U.S. jobs. More than 2,200 companies—80 percent are small businesses and startups; others are among the world’s best known brands—enjoy the benefits of CTA membership including policy advocacy, market research, technical education, industry promotion, standards development and the fostering of business and strategic relationships. CTA also owns and produces CES®, the world’s gathering place for all who thrive on the business of consumer technologies. Profits from CES are reinvested into CTA’s industry services.
The Proposed Tariffs Negatively Impact CTA Members
The United States’ overall trading relationship with China is fundamentally important to CTA’s members, who rely on the global supply chain—including China—to be competitive in the modern economy. CTA member companies have expressed opposition to tariffs in a multitude of ways, including contacting USTR, using social media, engaging strategic coalitions of concerned industries and communicating with their elected officials. Of the 284 proposed products in Annex C to receive tariffs of an additional 25 percent, CTA members identified 54 products they import from China which would disproportionately impact their businesses. CTA requests removal of these codes from the proposed list. These codes are identified and discussed in detail in Appendix A. The import value of Chinese products under these codes amounts to $9.8 billion (2017).
Of the companies that responded to CTA’s internal survey requesting information on the economic and operational impact of the proposed tariffs, 79 percent are small businesses. Of those small businesses, four out of five say they either cannot switch their sourcing from China to another country or cannot do so without a costly disruption to their business. Of those CTA members that can potentially switch sourcing, the majority find it economically or otherwise impractical to consider shifts to the United States.
CTA members report concerns about the impact of tariffs on their supply chains and their ability to deliver the quality products desired by U.S. consumers. As with USTR’s original list of tariffs imposed under Section 301 via Annex A in the June 20 Notice, our members remain concerned that the proposed additional tariffs will:
Put their businesses at a disadvantage relative to their competitors in other nations who can continue importing critical components from China at a fraction of the cost;
Increase the costs of technology products used by U.S. businesses, workers, and consumers across every sector; and
Raise the cost of living for most Americans, particularly given the enhanced risk of retaliatory tariffs by China.
The Proposed Tariffs will be Ineffective to Obtain Elimination of China’s Discriminatory Acts, Policies and Practices related to Intellectual Property
American companies doing business in China often face limitations, including ambiguous and ever-changing regulations and a lack of clarity in Chinese law, many of which USTR specifically addressed in its Report on the Section 301 Investigation. But CTA has long argued that actions taken to address inequity in the trade relationship with China should not include tariffs that will harm our own economy. Indeed, the retaliation already promised by China on U.S.-origin products will create a dangerous race to the bottom in the world trading system, wreaking havoc on global supply chains. The resulting economic harm risks destroying up to 455,000 U.S. jobs and reducing U.S. GDP by $49 billion. More, the ongoing cycle of bilateral retaliations between the U.S. and China often has detrimental effects on U.S. companies, who see retaliation in the form of regulatory delay and stalled opportunities. CTA members have been hurt by these tariff-related actions.
A better approach is to promote and encourage innovation and technological progress here in the United States. Appropriate laws, regulations, and deregulation at both the state and federal levelswill help U.S. companies strengthen their comparative advantage in technological innovation vis-à-vis China and the rest of the world.For example, CTA encourages the administration to better promote existing trade tools and enforcement programs so that U.S. companies can understand the many avenues already available to obtain trade assistance. Many of these programs—such as Section 337, online resources like “StopFakes.gov,” and in-person international assistance at U.S. embassies via the Foreign Commercial Service—are not widely known, especially among small and medium-sized companies.
Section 337 investigations by the U.S. International Trade Commission are a heavily-used mechanism that has brought much relief to U.S. companies in the areas of patent infringement and other unfair trade practices involving imported products. Two of CTA’s larger member companies, Canon U.S.A. Inc. (and its affiliates) and HP Inc., have successfully used Section 337 to obtain general exclusion orders against Chinese manufacturers, distributors and sellers of toner cartridges and photosensitive drum units that infringe Canon patents, and of inkjet printer cartridges that infringe HP patents. Focused and aggressive use of such laws, combined with cooperative efforts with U.S. Customs and Border Protection, is far more effective against discriminatory Chinese acts, policies, and practices than the imposition of broad-based tariffs. These programs ensure investments in intellectual property stay in the hands of U.S. companies and reduce the unfair advantage of Chinese companies. The proposed tariffs would have the opposite effect on intellectual property owners such as Canon and HP. The tariffs are an indirect and blunt tool that would saddle U.S. companies and consumers with the costs, not China. This is especially unfair for those companies already actively engaged in efforts using other legal means to combat Chinese patent infringers and counterfeiters.
Rather than imposing self-harming tariffs, CTA prefers to see the administration engage diplomatically with China alongside our international allies who are also injured by China’s unfair trade practices. Diplomatic engagement can address the concerns of governments and industries in a trade-neutral fashion. Key priorities for these efforts should include: clarification and increased transparency in Chinese IP laws; continued implementation of China’s specialized and unified IP court system; encouragement of innovation with progressive rather than protectionist laws; increased legal and regulatory due process; increased fines for IP violations; and increased enforcement activities, including joint or plurilateral programs.
USTR has recognized the value of diplomacy by filing a World Trade Organization (WTO) request for consultations with the Chinese government as part of its Section 301 actions to directly address Chinese laws that discriminate against foreign intellectual property rights holders and fail to ensure full patent rights for foreign patent holders. This is a welcome step in the right direction. In contrast to unilateral tariffs, the WTO is an effective forum in which to engage China on trade and investment concerns, including technical barriers to trade, intellectual property rights and the discriminatory treatment of goods and services. Multilateralism is effective, and the United States should use the WTO platform to engage our trading partners in the fight for fair trade rules with China.
CTA stands willing to help in such multilateral efforts. CTA has a rich history of working with our member companies on U.S. patent reform, and with sister organizations in foreign jurisdictions on similar issues. Modernizing China’s patent system would not only create a fairer trade environment, it would also save our innovative companies years of lost production and significant costs on litigation by addressing IP challenges now.
Continuing to negotiate and enter into strategic trade agreements will also aid U.S. competitiveness. President Trump’s willingness to reconsider membership in the Trans-Pacific Partnership (TPP) was positively received within the technology industryand would allow the United States to shape a world trading system in line with America’s values, interests, and priorities.
TPP would benefit the U.S. technology industry with the most advanced digital provisions ever set forth in a trade agreement, including rules against forced data localization and balanced copyright provisions that help innovations flourish. Because China is not a member of the TPP, involvement would give U.S. companies a competitive edge in the region relative to China. More, China has indicated it aspires to join the TPP. In that event, TPP members would determine the terms of engagement — a negotiation the United States should not miss. As with the TPP, the Trade in Services Agreement (TiSA) can also be used as a counterbalance to China’s influence — the United States has a growing services trade surplus with China.
The Proposed Tariffs Cause Disproportionate Harm to U.S. Businesses and Consumers
Administration officials have stated the proposed tariffs should have little negative impact on American business and consumers, but two studies commissioned by CTA and NRF from Trade Partnership Worldwide tell a more troubling story.
Our study on the overall economic impacts of the tariffs (Attachment 3) finds the administration’s proposed tariffs on $50 billion of Chinese imports, coupled with retaliation promised by China, will reduce U.S. gross domestic product (GDP) by nearly $3 billion and destroy 134,000 American jobs. Four jobs will be lost for every job gained.
The study warns that imposing tariffs on an additional $100 billion of Chinese imports will come at an even higher cost to the U.S. economy – destroying 455,000 jobs and reducing GDP by $49 billion.Even the best case scenario, assuming no Chinese retaliation, will result in a net loss of more than 76,000 jobs and a $1.6 billion drop in GDP.
The ten states that will suffer the highest job losses are Florida, California, Texas, Washington, New York, Georgia, Missouri, Pennsylvania, North Carolina and Ohio.That said, Job loss is expected in every state, mostly for less-skilled workers.More, the tariffs will significantly reduce the economic benefits of the administration’s recent tax reform and deregulatory efforts, bringing uncertainty to U.S. businesses and devastation to workers in key states.
The tariffs will also harm millions of U.S. businesses and workers across every sector that use innovative technology products to increase productivity, as well as consumers who depend on connected devices to access the internet on a daily basis. China is the exclusive or primary manufacturer of a range of goods that Americans enjoy every day, from cell phones to household goods. Tariffs on these products will put consumers at risk of price increases on numerous consumergoods, raising most Americans’ cost of living. Tariff-driven price increases will boost inflation, and the impact will fall disproportionately on older and lower-income Americans who are more likely to rely on lower-cost Chinese imports.
Ironically these tariffs will harm the very industries they seek to protect, all while failing to influence China’s behavior or help the administration’s stated goal of eliminating China’s discriminatory trade practices.
For example, the thermometer tariff line (HTS 9025.19.80) covers a broad range of consumer goods, negatively impacting nearly every American household. The common consumer products covered include products like outdoor thermometers, kitchen meat thermometers, digital thermometers that parents use for their children, and temperature sensors used in household thermostats.
Americans purchase 17 million thermostats each year to help manage energy costs, and thermostats are already subject to a 25% tariff (which took effect on July 6). Tariffs on thermostats will hurt U.S. consumers by imposing a double burden of (1) higher prices on a consumer necessity, and (2) higher energy bills because consumers will be less able to afford energy-efficient smart thermostat systems.
Tariffs will also harm the retailers who sell these consumer goods, as well as the small businesses who install thermostat systems. A similar case can be made against the proposed tariffs on motion sensors (HTS 8543.70.45), a product which comprises a core part of home security systems that millions of Americans purchase to enhance household safety. U.S. sales of motion sensors and home security systems reached $4.69 billion in 2017. As with thermometers, tariffs on motion sensors will subject U.S. consumers to higher prices and compromise household safety. These tariffs will likewise hurt the retailers and small business installers who sell and install home security systems by increasing prices and depressing demand. The proposed tariffs on thermometers and motion sensors thus contradict USTR’s stated aim in the product selection process of avoiding goods “commonly purchased by American consumers.” More, thermometers and motion sensors are not products targeted in China’s Made in China 2025 plan, and not part of China’s core industrialization strategy.As an additional example, the Annex C list is heavy in both semiconductors and the machinery that makes them. China represents just 5% of the global semiconductor market, but the United States is the world’s market share leader. Most semiconductors which the U.S. imports were actually made in the United States, shipped to China for final, low-end assembly and packaging, and then shipped back to the United States. Tariffs placed on the equipment used to manufacture semiconductors therefore impose a double cost for semiconductor companies that manufacture in the United States and employ hundreds of thousands of Americans.
Costs of tariffs on these items would be passed downstream to other American companies and sectors, exacerbating costs all along supply chains. As costs on key components rise, the inputs for small companies manufacturing in the United States will threaten their business models and competitiveness. In sum, the tariffs would penalize the U.S. semiconductor industry while failing to curtail discriminatory trade and unlawful IP practices outlined in the 301 investigation.
Conclusion & Recommendation
CTA urges USTR to engage China on specific, concrete issues to achieve the elimination of its laws and regulations that discriminate against U.S. businesses. The administration has unique opportunities to leverage multilateral action, join strategic trade agreements and aggressively promote existing enforcement programs, all of which will dis-incentivize China’s troubling trade behavior without risking the economic future of U.S. companies and workers. More, the administration is in danger of harming the very industries it seeks to protect by the imposition of the proposed tariffs. The administration is increasingly placing companies in a position of double jeopardy by placing tariffs on their own products while simultaneously dis-incentivizing manufacturing in the United States by placing tariffs on needed machinery.
In formulating responses to China’s unfair and discriminatory trade practices, the U.S. government should avoid punitive tariffs which harm the American economy and disproportionately burden U.S. businesses and consumers. The administration must also avoid ad-hoc retaliatory measures, which would severely and detrimentally affect the U.S. technology industry with its inherently global and interconnected supply chains. Given the significant U.S. services trade surplus with China, the administration should adopt policies with China that push for greater transparency, competition and open markets, while resisting the imposition of taxes and trade barriers that would harm American interests.
A trade war based on increasing tariffs will hurt both the United States and China, and both businesses and consumers. Such a trade war would have no winners — our markets would tumble, inflation would rise and Americans would suffer economically. While China’s trade behavior is troubling, diplomacy through constructive bilateral, plurilateral or multilateral processes can achieve the desired objectives without the disproportionate harm to U.S. businesses and consumers.
President and CEO
Consumer Technology Association
Vice President, International Trade
Consumer Technology Association™
Rationale for Recommending Removal from Proposed Tariff List
Anu Herranen is a product marketing, strategy and branding professional with years of experience in smart devices. As the Director of Marketing and Branding at Nortek Security & Control, she has several tech-based home security tips for homeowners.
It’s important to make sure that your fire safety is up to date. Check your smoke detector and CO2 detector by checking batteries at least monthly, and operational soundness also before the holidays. Many smart home and home security companies, like Nortek Security & Control, enable smartphone notifications—alarm triggers when there is an alert and instantly pushes notifications to your phone. Those features are even more important when travelling and when the house is empty.
Winter holidays are also a good reason to upgrade your security system, whether you are staying at home or traveling. Also consider your elderly relative or your college student when they leave their house/apartment empty for the holidays. The options today are easier to both install and use for multiple needs and life situations.
Most of the systems are wireless, which enables you to add and complement your system later with digital doorbell cameras or electronic locks, and some systems, like NSC’s 2GIG Rely, are designed to be mobile so you can take the security system with you when you move.
Many people utilize Amazon type of delivery services nowadays for easy and carefree Christmas shopping, but porch side thefts are increasingly common. Digital doorbells are a great way to make sure that you know when a package arrives, and you can even advise the delivery man to store the package in a safe place.
Here at Nortek Security & Control, we’ve created a program dedicated to philanthropy and giving back to our community. It has been appropriately named NSC Cares, and we are proud of the many different ways our employees and company gives back throughout the year. Our goal with the NSC Cares program is to have meaningful impact in our communities and, when possible, to partner with our customers to further promote safety and well-being in their communities as well. The projects we work on are designed to develop and enhance security and safety of homes and families, especially women and children. We have chosen to pursue two strategic priorities; family safety and fostering innovative thinking by leveraging technology and also to ensure the next generation benefits from the opportunities of the digital economy. By leveraging NSC’s innovative technology, employee expertise and skills, and partner networks, the NSC Cares program’s contributions include employee volunteerism, partnerships with non-profit organizations, and product or system donations to communities locally around US.
Our responsibility to the local communities is foundational to our corporate culture. We believe that giving back to the San Diego community is a privilege and feel honored to donate our goods and services to Casa de Amparo alongside Saved in America. For our latest project, we teamed up with both of these organizations to ensure the continued safety and well-being of children being housed at the Casa Kids Campus. We donated telephone-entry systems, automated gate operators and electronic key fobs and we worked with one of our local dealers to handle the proper installation and on-site training for the employees of Casa de Amparo. The Casa Kids Campus provides a safe environment for children and families traumatized by severe child abuse and neglect. We are proud to work with Casa de Amparo to continue ensuring safety and well-being are a top priority.
“We at NSC acknowledge the special connection and role we have with keeping our community safe by offering Casa de Amparo physical access control solutions,” said Anu Herranen, Director of Marketing and Branding at NSC. “It’s very rewarding to know that NSC has a hand in keeping some of San Diego’s children safe.”