Top Cisco executives: We anticipated Trump's China tariff hike, but anything more is worrisome
- Two of Cisco's top executives say additional U.S. tariffs on Chinese imports would harm American industries as a whole.
- Cisco CEO Chuck Robbins says the company was prepared for last week's tariff hike to 25% from 10% on $200 billion worth of Chinese goods.
- Cisco CFO Kelly Kramer says, "If it goes to all China imports it's not only going to impact us, but it's going to impact every industry."
Two of Cisco Systems' top executives told CNBC that additional U.S. tariffs on Chinese imports would not just harm the San Jose, California-based network equipment maker but American industries as a whole.
"If it goes to all China imports it's not only going to impact us, but it's going to impact every industry," Cisco CFO Kelly Kramer said Wednesday evening on CNBC's "Mad Money."
With a stalemate in trade talks, the Trump administration this week released a list of about $300 billion in Chinese goods that could be hit with tariffs, which effectively would put duties on all of China's imports into the U.S.
Cisco Chairman and CEO Chuck Robbins, sitting next to Kramer, said the company was prepared for last week's tariff hike to 25% from 10% on $200 billion worth of Chinese goods, making the increase "relatively immaterial at this point and built in to our guidance."
For its part, in retaliation for the moves by the U.S., China announced plans Monday to raise tariffs rates on $60 billion of U.S. goods.
In reporting better-than-expected quarterly earnings, revenue and forward guidance after the bell Wednesday, Cisco said it had been reducing its manufacturing in China in anticipation of the latest White House move, which President Donald Trump had been threatening for some time.
"The reason we've been able to mitigate ... is it's only it's a portion of the business," Kramer said. "We'll adjust" if that changes, she added.
Meanwhile, Walmart CFO Brett Biggs echoed similar sentiments, saying Thursday that tariffs could lead to higher prices. "Increased tariffs will increase prices for customers," he said.
Like Cisco, Walmart also reported strong quarterly results. Both companies' stocks are components of the Dow Jones Industrial Average. With Cisco shares up 7% and Walmart rising nearly 2%, the Dow was heading Thursday for a three-session winning streak, after a dismal start to the week on a barrage of negative trade headlines.