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Trump Administration Proposed to Apply a 25% Tariff on 1300 Chinese Products
April 5, 2018 | TrendForceEstimated reading time: 2 minutes
The Trump administration on April 4, 2018 published a list of 1300 Chinese exports and proposed to apply a 25% tariff on these products. However, the proposal would have limited impact on LED companies in China and Taiwan, according to LEDinside, a division of TrendForce. This is because the LED products included in the list are mainly intermediate goods, including wafers and backlight products. These products account for only a small proportion of all the LED products that China exports to the US market, while most of these intermediate goods produced by Taiwan LED companies are shipped to China.
“Among all the products in the list, categories including 85414020, 85419000, and 90330020, etc. are related to the LED industry”, says Figo Wang, senior analyst of LEDinside. China is a major producer of LED end-products and end-applications, but the three categories above are intermediate goods in the industry. The target market of these intermediate goods includes mainly manufacturers of LED end-products in China. The intermediate goods are not directly sold to individual consumers. Therefore, they only account for a small proportion of LED exports, and contribute to less than 5% of the revenue of LED industry. “There are only a few makers of LED end-products in the United States, which means even less intermediate goods would be directly exported to the United States”, says Wang.
LEDinside notes that, the HS code of LEDs made by China is 85414010. In this list, the category of 85414020 actually refers to solar cell products according to information provided by Chinese Customs. Therefore, the value of LED exports that may be subject to the tariff is only US$46 million in 2017. Even if the category of 85414010 is also included to the list, the value would be only US$129 million. The total value would be less than US$200 million, which would have only a very limited impact to China’s LED exports, of which the total value exceeds tens of billions US dollars.
On the other hand, a large proportion of China’s LED exports to the U.S. are end-applications, such as lighting products in category 94540090 and 94051000, and display products in category 85312000, etc., but the above three categories are not included in the tariff list this time. In addition, as there are only a few US-based manufacturers of end LED applications, most products of branded lighting companies and sales channels are made in China. If these products are subject to the tariff in the future, the LED end-products sold in the U.S. market may face significant price rise.
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