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Chen Yansheng analyzes the impact of Sino-US trade disputes on the lighting industry
Aug 16, 2018

On the afternoon of August 14th, in the online salon of the classroom, Chen Yan, director of the China Lighting Association, gave a comprehensive report and in-depth analysis on the Sino-US trade disputes. At the same time, he answered many of the focus issues of the company's concerns. Details are as follows.

1. The impact of Sino-US trade disputes on the lighting industry is currently reflected. If it has not yet been reflected, then when do you expect to be fully presented?

Chen Yansheng: At present, it has not been reflected. From the point of view of export data, there is still no impact, and the basics are still normal. From the current point of view, LEDs are basically flat and have increased slightly. Since the 200 billion increase in tariffs has not yet been implemented, it will not be known until the beginning of September that the 25% of the 200 billion increase is officially implemented. If implemented, I think it will have an impact.

2. Some scientific research projects between China and the United States, such as smart lighting, agricultural lighting and other cross-border cooperation, then the impact of Sino-US trade disputes on such projects?

Chen Yansheng: As far as I know, the official cooperation project has not been seen yet, and the civil cooperation projects should not be greatly affected.

3. If the manufacturers of export lighting products use American lighting products, such as Cree, will they receive tariff reductions?

Chen Yansheng: This is not decided by China. It depends on the US government. They have some immunity rights.

4. After the increase of tariffs, will it cause the US manufacturing industry to return, causing US lighting products to replace Chinese lighting products, will this trend occur?

Chen Yansheng: There may be, but the impact is not great. For example, GE, everyone knows that GE wants to sell lighting, and it may be sold to Chinese companies. There are also some lighting companies. They have manufacturing companies in the United States, and some also have production in Mexico, but these companies have far-reaching production. Far from meeting the needs of the United States, the manufacturing reflow in the United States will not be lighting, and the products produced by American lighting companies are not high in the US market. In the past, the first import was a Chinese product and the second was Italy. So this worry is not necessary.

5. Will Chinese companies switch to other countries, such as Vietnam, so can they reduce tariffs?

Chen Yansheng: This situation exists. However, Chinese companies must consider it in the long run and cannot consider it in the short term. Adding tariffs is a long-term behavior or a short-term one. But if you want to transfer to other countries for production, it is not short-term, but long-term. For example, when the EU carried out anti-dumping, but later the EU conducted an anti-circumvention investigation, but there is no anti-circumvention problem in the United States. It is also okay if the company itself has plans for production in other countries. Remind everyone that if you want to build a factory, you should consider the long-term.

6. Does the tariff increase to 25% or increase by 25% on the original basis?

Chen Yansheng: This is very clear, adding 25% to the original tariff.

7. Will the Chinese government counterattack the United States, for example, increase tariffs on lighting products of American brands?

Chen Yansheng: This depends on the list of 60 billion yuan, which involves lighting products. There are too few lighting products imported from China, and it doesn't make much sense. We have to add tariffs, such as soybeans, pork, and beef.

8. If the luminaire is split as a component, such as SDK, CKD, and exported to the United States for assembly, can it be circumvented?

Chen Yansheng: Many countries import the whole product, which is higher than the tariff of parts and components. This refers to the original tariff. Now, after the increase, it is necessary to see if there are these parts in the list of additions. As far as the current components of the 9405 are concerned, the parts of the lamps are included, so it does not make much sense.

9. When the smart light is exported to the United States, is it that the lamps and controllers are separately calculated for tariffs?

Chen Yansheng: This depends on the specific product. The lamp part and the driving part are separate or integrated.

10. Please make a prediction on the 200 billion list policy. From the discussion to the implementation, how long does it last after implementation, is it accompanied by Trump's term?

Chen Yansheng: This issue is not related to the lighting industry and involves the entire Sino-US relationship. As for the taxation of 200 billion yuan, it will not be confirmed until early September. How long it will last depends on the relationship between China and the United States. The overall situation is uncertain. We need to continue to pay attention to Sino-US trade disputes, pay attention to Sino-US economic and trade relations, and pay attention to The policy on lighting products in Sino-US trade disputes.

11. Can the China Association for the Advancement of the Appeal be appealed on behalf of the lighting industry, such as the tax exemption granted by the medical industry in the United States?

Chen Yansheng: The China Association for the Advancement of Education does not have this plan. If you have any opinions in this regard, you can pass our response to the China Chamber of Commerce for Import and Export of Machinery and Electronics. They have plans in this regard. They will have representatives to attend the hearing of the US Trade Representative Office. He will give feedback on behalf of Chinese companies.

12. China's current exports to the United States, as far as you know, if the 200 billion list is implemented, are these products in China still competitive internationally?

Chen Yansheng: It depends on specific needs and market competition. Before the increase, the price/performance ratio of Chinese products is very competitive. After the increase, the competitiveness will definitely decline. From the point of view of the US market, consumers are still able to accept it. At present, they have not seen products that can replace China. After the tariffs are imposed, the American people will pay for it.

13. Will Mexico become a country in which lamps and lanterns are manufactured and transferred?

Chen Yansheng: There will be some, but only part of it. Only some American companies have set up factories in Mexico. Similarly, there are some problems in the North American Free Trade Area. Trump and Mexico and Canada are also talking about whether the free trade zone will continue, but certainly not as much as 25% for China. Some products will be in Mexico. Production, but Mexico's products are not enough to meet the needs of the US market, but will increase a certain share, or increase than the previous share.

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