As trade tensions between the U.S. and China show no real signs of cooling off, it could be a huge problem for all, according to Cisco CEO Chuck Robbins.
“The first phase of the 10% tariffs we were impacted and we have dealt with. I think we were able to deal with those fairly seamlessly,” Robbins told Yahoo Finance at the World Economic Forum in Davos, Switzerland. “But it is pretty clear that the 25% tariffs will be problematic for all of us.”
Robbins explained that he has been impressed with the resiliency of the global economy over the past couple of years despite all of the geo-political drama. But as a technology company heavily exposed to the global markets, the consequences of the trade war could have a really detrimental impact on Cisco’s future innovation, according to Robbins.
“What we don’t want to see is the 25% for some of us technology companies to actually cut back another area like research and development at a time where we need to be driving innovation on a global basis,” he said.
Nevertheless, Robbins remains hopeful about some sort of resolution to the trade war. “We’re optimistic again at a minimum that the U.S. and China between now and March can make enough progress that even if they don’t have a final deal, that they can at least push out this deadline and keep negotiating and can get to something that we can live with long term.”
U.S. and Chinese officials will be holding another round of trade negotiations on January 30 and 31 in Washington, D.C., as the trade deal deadline of March 1 approaches.
For more of Yahoo Finance’s complete coverage of the World Economic Forum in Davos, Switzerland, click here.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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