Six questions on the impact of new tariffs on LED lighting
1. Do price increases caused by tariffs hamper LED industry growth?
Higher prices are inevitable with new tariffs (customs duties) imposed by the US government on imports of goods. Custom duties are levied at the time of import and are paid by the US importer directly to the US government. The overall effect is higher consumer prices. Higher prices slow down demand and can stunt industry growth.
2. Will there be a major supply chain interruption?
Supply chains will be stressed within a short period of time if there is no agreement on trade soon. It is very difficult to mimic existing industrial ecosystems that have taken decades to build. But even if the trade disputes abate, the supply chain impact can last much longer.
3. Will some of the manufacturing move to America?
Using U.S. suppliers doesn’t protect against price increases as US manufacturers use imported components that will bear the higher tariffs. Add the higher US labor costs and the eventual pricing will be even higher.
4. Don’t Green Energy Rebates help offset the added tariffs?
We have seen rebates continue to decrease across the board in the US. With higher tariffs and lower rebates the result is longer payback for the consumer.
5. When might the tariff nightmare end?
Impossible to tell if tariffs will go away anytime soon. It seems that both sides are waiting for the other side to feel the pain before they come to the table to negotiate an equitable solution.
6. Is there anything to be optimistic about?
Of course! LEDs are still the best option compared to any other type of lighting. LEDs are the most efficient way to reduce energy consumption and even with higher prices provide the best ROI. We see the tariffs as a temporary development and not much more than a little bump in the road. It’s much better if tariffs go away soon but with or without tariffs LEDs will continue to see double digit growth for many years to come.
About LED Trail: LED Trail is a Portland, OR based manufacturer and distributor of commercial and industrial LED lighting products and supplies. LED Trail is a wholesale supplier, selling our products through our authorized dealers across the USA and internationally. LED Trail’s LED lights offer exceptional energy savings to all types of lighting applications. The extraordinary performance, long life and high efficiency of our LEDs are designed to address all your lighting needs. With LED Trail you will Save Energy and Save Money.