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Cisco chief: New US tariffs on Chinese goods would be 'fairly significant' for us

Saheli Roy Choudhury
  • Cisco might have to deal with the fallout from an ongoing trade war between the U.S. and China by passing on higher prices to its customers, Chuck Robbins, the chairman and CEO of Cisco, told CNBC.
  • The tech company is optimizing its global supply chain and having discussions with the Trump administration to help US officials understand the implications of tariffs on many of Cisco’s products, Robbins said.

Cisco CSCO might have to deal with the fallout from an ongoing trade war between the United States and China by passing on higher prices to its customers, the company's chairman and CEO told CNBC on Tuesday.

"The tariffs that are suggested are across a lot of our core networking products, so it's fairly significant," Chuck Robbins told CNBC's " Squawk Box " when asked about the impact of the ongoing trade war.

The tech company is working on several different issues around the impending duties, he said. Preparations include optimizing its global supply chain and having discussions with President Donald Trump administration to help American officials understand the implications of tariffs on many of Cisco's products.

"We're going to have to deal with it through our pricing, just like we've done," Robbins said. "If you look at what's happened with memory prices in technology, everybody passes those through and I think this is the way most companies are going to have to deal with it."

Trade tensions between the two economic powerhouses escalated in recent weeks after President Donald Trump reportedly said that he was "ready to go" on tariffs for another $267 billion in Chinese goods "if he wants."

That would come on top of planned tariffs on $200 billion of Chinese goods in several industries, including technology. Beijing has vowed to retaliate if the U.S. takes any new steps on trade.

Cisco, along with Dell 4331-HK , Juniper Networks JNPR and Hewlett Packard Enterprise HPE , reportedly issued a last-minute appeal to the Trump administration to remove some important products from being included in a potential new round of tariffs.

The four companies said in a letter to the office of the U.S. Trade Representative that tariffs on networking equipment would increase prices for consumers and delay investments, the Financial Times reported last week.

Cisco is also trying to convey to the administration the potential damage that tariffs could have on research and development investments, according to Robbins. He said that the White House is listening to the concerns raised by his and other companies.

"I've been pleased with some of the questions they've asked," he said.

Still, Robbins said he is hoping the U.S. and China could come to a favorable conclusion before the next round of tariffs are implemented.

"We need to get to a place on a global basis where we have fair, open trade," Robbins said. "It's going to have some pain associated with it, and it's across all industries. "

— CNBC's Liz Moyer and Reuters contributed to this report.



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