25% tariff strikes, Chinese mainland LED manufacturers are greatly affected

The latest US plan to impose a 25% tariff on Chinese-made products from January 1, 2019, is expected to cause LED lighting suppliers to reduce orders to Chinese manufacturers and transfer some orders to other Asian countries.

In the latest published tariff list, more than 30 kinds of LED lighting products are included, accounting for about 80% of the value of Chinese lighting products exported to the United States. Since LED bulbs and LED tubes are high-volume standardized products, suppliers are expected to bear additional tariffs to keep prices in the US market stable, or slightly higher than previous prices. But embedded and custom lighting products are much more expensive than LED bulbs and LED tubes, so many suppliers will raise prices to cope with the effects of tariffs or seek other suppliers outside of China.

Many mainland Chinese companies have disclosed that they have received many urgent orders and are required to deliver them by the end of 2018 to avoid the upcoming 25% tariff.

In April 2018, the United States announced the first round of tariffs imposed on Chinese products, involving only a few LED lighting products. Subsequent reductions in Chinese manufacturers’ exports to the United States far exceeded initial estimates.

As a Taiwanese LED manufacturer whose production cost is 10-15% higher than that of its Chinese competitors, it may receive a large number of orders transferred from mainland Chinese manufacturers.