Robotics ETF May Be Relatively Insulated from U.S.-China Trade War

In the current environment of increased trade barriers, ETF investors should consider the relatively nimble nature of robotics and A.I. in the international markets and look to a strategy to diversify into this growing industry.

On the recent webcast (available On Demand for CE Credit), Tech, Trade Wars and the Market: How to Position Your Portfolio, Travis Briggs, CEO of ROBO Global U.S., pointed to the ongoing U.S. and China trade war that has topped the list of investors’ concerns.

“As the trade war between the US and China continues to escalate, the tariffs and barriers on imported products threaten to slow business activity, create supply chain friction and dampen international trade – not only between the two countries themselves but around the globe,” Briggs said. “No one wins a trade war.”

The trade war has been partially sparked by the alleged unfair transfer of American technology and intellectual property to China, according to President Donald Trump. China’s push to innovate, specially the government’s initiative called Made in China 2025, is seen as a threat to U.S. technology companies. In response to that threat, the Trump administration announced tariffs aimed directly at many of the robotics, automation and artificial intelligence-specific industries key to China’s plan, including aerospace, automobiles, information technology and robotics.

While tariffs may be bad news for some industries, such as U.S. agriculture, the trade barriers may help give U.S. innovators a leg up on the global tech field.

“For companies in the U.S. and abroad that are delivering today’s most innovative products and technologies in robotics, automation and A.I., the trade war is bound to be nothing more than a blip the size of a robot’s microchip, at least in the short-term,” Briggs said.

Robotics, Artificial Intelligence & Tariffs

Specifically, Briggs argued that those focused on robotics and artificial intelligence may barely feel the effects of tariffs. China isn’t a big enough competitor in robotics and supply chain yet, and it is lagging behind in the global export market for advanced technologies.

“The tariffs that have been imposed to date – though it’s clear there are more to come – are not likely to make a difference to the global supply chain for robotics,” Briggs said.

Trade restrictions can also significantly raise the cost of maintaining global supply chains, which may result in a re-shoring of some production processes coupled with heavy automation.