CTA, NRF Urge Trump Administration To Back Off China Tariff Proposals
Anyone in the market for a new television this year might want to take seriously a study released Tuesday by the Consumer Technology Association (CTA) and the National Retail Federation, warning that if the Trump Administration’s 25% tariffs go through as proposed on China-made TVs and other electronic devices, it will bring about price increases not often seen in the consumer electronics industry.
A new study jointly commissioned by the CTA and NRF indicates that Trump’s proposed tariff action would increase the price Americans pay for TVs by up to an estimated $711 million, collectively, over the next year.
“These proposed tariffs are bad for the economy, businesses and American consumers,” stated Gary Shapiro, CTA CEO and president (pictured at top). “For TVs, just one of the 1,300 products on the administration’s list, American pocketbooks will suffer. Now that China has expressed some willingness to open its market and strengthen protection of intellectual property, the Trump administration should immediately initiate negotiations.”
The study looks at the estimated consumer impact of 25 percent tariffs on imports of TVs and other product categories from China, and finds the proposed tariffs would increase prices on TVs from China by 23 percent and increase prices for all TVs by four percent.
Trump has taken on China for its alleged lax enforcement of intellectual property rights, which has reportedly cost U.S. rights holders (and others) billions in lost licensing revenue. Certain Chinese companies allegedly appropriate patented technologies and other IP used in goods sold here, without paying the fees rightfully owed to the innovators or patent owners.
However, Trump’s tariffs are not necessarily being applied only to goods carrying pirated IP, in many cases, and anti-tariff advocates argue that U.S. end-users end up being penalized (essentially taxed) for any IP law violations allegedly unenforced by the Chinese government. In addition, Chinese companies purchase billions of dollars worth of components, products, services and IP from companies outside of China (many in the United States), who could potentially be harmed by the proposed tariff actions, critics have warned.
The CTA said a TV made in China that costs $250 today would cost $308 after the tariffs are applied, and one that costs $500 today would cost $615 after the tariffs are applied.
Even many television brands that are not based in China source televisions or key component parts from China-based factories, and will face the tariff action.
As televisions go, there are no real U.S.-based manufacturing companies left to take advantage of the tariff action. Currently, there are virtually no television manufacturers producing display panels or finished televisions entirely in the United States. Taiwan’s Foxconn, through its acquistion of controlling interest in Japan’s Sharp Electronics, has proposed building a massive LCD TV panel and TV assembly campus in Wisconsin. Plant construction was due to begin this spring spring, but no official groundbreaking announcements have yet been made.
Major Chinese brands that could feel the biggest impact include TCL, Hisense, Haier, Westinghouse and others. In addition, brands not typically known to be Chinese often source at least some products built to specification from China-based fatories. Such TV brands include: Vizio (third ranked U.S. TV market share in some screen sizes), Insignia, Element and many others.
Even big Japanese players often have sets or their component parts made in China and shipped into Mexico for assembly and transport across the border into the United States.. Indeed, many large-format LCD panels are made in China and shipped to TV assembly plants, often in Mexico, where NAFTA has so far protected products from such tariffs or duties.
President Trump has mentioned in campaign rhetoric his intention to take on NAFTA as well, but so far that promise has not been acted upon.
We’ve asked various companies at most risk of having products subjected to the tariffs for comment on Trump’s proposals, but so far have not received takers. But the CTA and NRF, represent U.S. retailers, among others, and are speaking loudly for the TV makers as well as the thousands of U.S. employees who benefit from the Chinese goods sold here.
“China’s unfair trade practices must be addressed, but as this study shows, tariffs aren’t the answer and will punish U.S. consumers in the form of higher prices,” said NRF president and CEO Matthew Shay. “If these tariffs take effect, they will force American families to pay more for TVs and other products. We urge the administration to avoid taxing Americans through tariffs and instead work with our like-minded trading partners and develop a serious, long-term strategy to pressure China to play by the rules.”
So what does this mean for you, a prospective U.S. television buyer? That bargain TV price you might have been waiting for on your next Roku TV or 4K Ultra HDTV may not happen this year, or even the year after that. In fact, you might pay even more for it than you would have last year.
In short, the best bargains of the year on that TV you’ve had your eye on might only be available right now, if you hurry.
By Greg Tarr
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