How Much Does The US Tariff Impose On The LED Industry

Since the US Trade Representative Office (USTR) announced in April this year that the list of "301 sanctions" on 2,300 Chinese products has been subject to a 25% tariff, the Sino-US trade war has officially entered a feverish situation. In July, the US government again issued a list of tariffs, which is expected to increase taxes by 10% on Chinese products valued at US$200 billion. In the two-stage list of 301 sanctions, LED components and products are among them. In the second phase, when the taxable list of Chinese products worth $16 billion is about to take effect, the LEDInside will be comprehensive for readers. Analyze the impact of the Sino-US trade war on the LED industry.

Judging from the first phase list that took effect in July, most of the affected LED products are semi-finished products, including silicon wafers and backlight products. According to an analysis previously published by LEDinside, this tariff list is mostly affected by US companies that have capacity in the US and must import semi-finished products from China into finished products.

From the perspective of impact, since the LED lighting products exported by China are mostly finished products, the impact on the price of LED lighting products is still not obvious. In this regard, LEDinside analyst Wang Ting also pointed out: "In July, the lighting market demand is still sluggish. However, the situation of falling prices has not been observed."

The second wave of the 200 billion list, which has not yet determined the implementation time and details, covers a relatively wide range of LED products, including more than a dozen items involving LEDs and lighting. The total export volume of these lighting items covers Nearly 75% of China's lighting exports, the amount exported to North America is more than 8 billion US dollars. It is indisputable that the United States has always been an important export market for LED lighting products in China. Sino-US trade warfare will be difficult to avoid, whether it is the impact on China's LED industry or related US companies.

From the current supply of LED lighting products, 85% of LED lighting products are produced and assembled in China. Although there are still LED lighting production lines outside China, the production capacity outside China is insufficient for the vast US market demand. To meet the needs of the US market. Therefore, in addition to the impact of the tariff list on Chinese and US manufacturers, if the manufacturer reflects the increase in cost on the price, American consumers may face the situation of rising end product prices.

In fact, after the US government announced two wave lists, it was the US companies that first announced that the operation would be affected. Chinese manufacturers have already begun to look for countermeasures. In order to reduce the impact of tariff lists, Chinese manufacturers may reduce the proportion of sales to the US market, thereby increasing the proportion of sales to markets outside the United States. Although LED packaging factories with production capacity outside China may benefit from the transfer effect caused by the tariff list, overall, if Chinese manufacturers sell their products to markets outside the US at cheaper prices, It is feared that competition for prices will once again lead to a positive message for manufacturers outside China.