The US Department of Commerce (DoC) warned a new trade policy set to limit purchases of network technology and software from certain countries could impact as many as 4.5 million businesses and cost them up to $20.2 billion each year.
In a report, the DoC stated the rule would “likely increase production costs” for affected companies as they “substitute higher-priced alternatives for restricted imports”.
It also warned of possible “delays in the completion of projects” due to the need to re-evaluate and potentially modify purchases or designs to avoid restricted components.
The DoC expects small businesses to be hardest hit, noting they “may not have the same ability to deal with the burdens, both direct and indirect, associated with the rule” and will have to either absorb those costs or “pass them along to their consumers in the form of higher prices”.
But the department also expects benefits, citing an increased ability to prevent or mitigate denial of service attacks, and also threats to data integrity and privacy.
The policy is due to be implemented on 22 March and will restrict ICT deals with China, Russia, Iran, North Korea, Cuba and Venezuela.Subscribe to our daily newsletter Back