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Along with Tesla, whose letter to the US trade representative made headlines earlier this week, SpaceX has also commented on President Trump's policy of levying tariffs against America's trading partners. While Tesla advised the Trump administration about the high manufacturing costs that it might face due to the tariffs, SpaceX, which relies on few imports for its satellite service, has taken an opposite approach. Its letter is also signed, unlike the one from Musk's car company. In it, SpaceX cites unfavorable global regulations against its Starlink satellite service and equipment.
SpaceX Cites Spectrum Sharing, Licensing Fees & Import Duties As Hinderance To Expanding Global Satellite Market
Tesla's letter, which had warned the Trump administration that tariffs against America's trading partners could lead to reciprocal tariffs and increase its manufacturing costs. Tesla outlined that the reason behind the high costs was that had no choice but to import certain components for its vehicles.
On the other hand, SpaceX has informed the Trump administration about the barriers that its Starlink satellite internet service is facing globally. According to SpaceX, it is facing "regulatory complexities and trade barriers" in nearly every country in which it operates. The firm adds that these constraints are hampering "U.S. leadership in the space domain."
Highlighting these laws, SpaceX also claims that its competitors are using them to hamper the firm from providing "better quality and lower cost service to customers" seeking satellite internet. SpaceX's Starlink operates the world's largest satellite internet constellation and has established a foothold for itself in consumer and business satellite internet.
According to SpaceX, it must pay governments to access wireless spectrum, pay import duties for importing Starlink terminals in other countries and coordinate with domestic carriers in certain countries for spectrum sharing. These conditions and regulations substantially and artificially "increase the cost of operating in these countries," says the firm.
Import duties on Starlink terminals are particularly a thorny issue for the firm. According to SpaceX, while the US has no similar import duties on similar foreign products, "import duties paid in a handful of countries represent a significant cost increase for Starlink products in those countries." The fees and other costs are sometimes a large portion of the total Starlink costs, which in turn affects SpaceX's ability to increase its market share and sell the Starlink service to more users.
The duties are on products classified under HTS 8517.62, adds the firm. Dividing into the specifics, SpaceX stresses that one reason it is battling high costs abroad is that old regulations assume that satellite services require importing a few terminals instead of the millions that it has to ship worldwide.
As a result, the firm concludes:
If fees are assessed on a per-terminal basis, rather than via a blanket license or some other regulatory arrangement to account for the new design of non-geostationary satellite networks, the cost becomes an impediment to rolling out service to additional customers.
