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Who’s Afraid of the Big Bad Tariffs?

Who’s Afraid of the Big Bad Tariffs?

Three weeks ago, the United States Trade Representative released a list of items from China that will be impacted by the recent tariff hikes. Among them, LED lighting. lightED recently spoke with two U.S. manufacturers about possible adjustments they will have to make.

According to Jian Ni, CEO for Forest Lighting, LED lamps and luminaries offered by Forest Lighting are not included in the proposed tariff list. This means their products will not be impacted by the proposed tariffs.

However, LEDVANCE isn’t as certain they won’t face some sort of fall-out. “We are monitoring the situation and working closely with NEMA to ensure that our customers’ best interests are represented,” says Matt McCarron, Vice President of Industrial Commercial Channel. “Some components used in our SYLVANIA LED lamps produced here in the United States are included in the proposed tariffs, but these are just proposed and not a certainty.”

However, McCarron says tariff or no tariff, their LED portfolio offers distributors a unique selling point since it’s made by U.S. workers.

“Rather than wait for lamps from overseas, we can respond quicker with these products and be more agile.  Inventory issues can be minimized, and distributors can have less money tied up in inventory.  Since the products are manufactured in America with U.S. and global parts, they qualify for BAA (COTS item) and TAA compliant projects, opening the door to more opportunities.”

The tariff isn’t slowing either company. In fact, Ni says they are not planning any changes to their current business model. He says the proposed tariffs appear to be a non-factor in the plans for rapid growth.

Both companies agree that continued conversations with the marketplace will not only improve performance, but increase new product introductions.

In fact, the tariff may create opportunities. One target in particular for LEDVANCE: government contracts.

“Our distributors can count on our unique locally-produced LED portfolio to take advantage of the huge market for government contracts,” says McCarron. “As mentioned, since the products are manufactured in America with U.S. and global parts, they are uniquely qualified for BAA (COTS item) and TAA compliant projects.  A major part of the lamps is the glass from our Kentucky factory.  This advancement is not just creating more advanced U.S. factories, it is also creating a more advanced U.S. workforce.”

While prices may go up slightly from imported steel and aluminum used in most LED luminaries and lamps manufactured in the US, Ni points out that the slight increase should not be the only element of buying decision. “Performance, life, color, efficacy, and system integration and customer service ultimately make up the purchasing criteria for educated lighting buyers and users.”

But what about the distributors? Do they have the same feelings? While the manufacturers seem minimally concerned, will the distributors have the same reaction? Look for that reaction coming soon.

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Diane Duenez

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