Increasing Tariffs on LED Product Continues to Impact the Industry

On August 1, 2019, President Trump announced an additional 10% tariff on US$300 billion Chinese imports which will come into effect in September. The new listed products which will be imposed with taxes also include several LED products.

(Image: Pixabay)

LED products that are listed in the new 10% tariff list include “Ballasts for discharge lamps or tubes”, “electrical lighting equipment of a kind used on bicycles”, “flashlights”, and a series of electrical filament lamps, as well as LED lamps.

According to data from the China Association of Lighting Industry, these lighting items in the new list accounted for 18.2% of China’s lighting exports to the US in 2018. Among which, the export amount of “LED lamps” was US$1.768 billion in 2018. All these products listed have not been charged with extra tariffs previously.

Since 2018, the U.S. government has imposed additional tariffs on Chinese imported product. Currently, all the listed products are charged with 25% extra taxes. Due to the tariffs, several U.S.-based lighting companies including Acuity Brands and Eation have increased prices of the products. Meanwhile, many LED product manufacturers are also moving their production lines from China to Vietnam or other countries to avoid the extra cost.

Supply chain of the LED industry was also affected by the trade war. International lighting companies including Osram and Signify have reported sales decline in their recent quarterly reports as uncertainty of the global market goes on. Semiconductors equipment makers like AIXTRON and VEECO also announced sluggish business peformance as customers are reluctant to invest in production expansion.

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