Views on Lighting Business Related Issues About US Trade War

In the afternoon of August 14, Chen Yansheng, chairman of the China Lighting Electrical Appliances Association, made a comprehensive report and in-depth analysis on the China-US Trade War at the online Salon of the Ming Classroom. He also answered many key issues of concern to the enterprises, as follows.

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

A: At present, it has not been reflected yet. From the export data point of view, has not yet affected, basically normal, from the current point of view, LED basically flat, slightly increased. Because the 200 billion additional tariffs have not yet been implemented, it will not be until early September that 25% of the 200 billion additional tariffs will be officially implemented. If they are implemented, I think it will have an impact.

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

A: As far as I know, the official cooperation projects haven't seen yet. The non-governmental cooperation projects should not be greatly affected.

3. If the manufacturer of export lighting products uses American lighting products, such as Cree, will it get tariff relief?

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

4. Will the increase in tariffs result in the return of American manufacturing and the substitution of American lighting products for Chinese lighting products?

A: Maybe, but not much. GE, for example, everyone knows that GE wants to sell lighting, and may sell it to Chinese companies, and there are also some lighting companies, they have production enterprises in the United States, and some in Mexico, but the production of these enterprises is far from meeting the needs of the United States, the U.S. manufacturing industry will not return to lighting, the United States. The market share of products produced by national lighting enterprises is not high in the US market. In the past, the first importer was Chinese product and the second one was Italy. So this worry is not very necessary.

5. Will Chinese enterprises transfer to other countries for production, such as Vietnam, so as to reduce tariffs?

A: This situation exists. However, Chinese enterprises should not take short-term consideration into consideration in the long run. Tariffs are long-term or short-term. But if we want to transfer to other countries, it is not short-term, but long-term. For example, when the EU carried out anti-dumping, but then the EU conducted an anti-circumvention investigation, but the United States imposed tariffs there is no anti-circumvention problem. If the enterprise itself has plans produced by other countries, it is also acceptable. Remind you that if you want to build a factory, you should take into account the long run.

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

A: It is very clear that the original tariff increases by 25%.

7. Will the Chinese government fight back against the United States, such as increasing tariffs on American brand lighting products?

A: It depends on the list of 60 billion yuan, which involves lighting products. China imports too little American lighting products, which is not very meaningful. We will increase tariffs, such as soybeans, pork, beef and so on.

8. If the lamps and lanterns are separated as parts, such as SDK and CKD, and exported to the United States for assembly, can the increase be avoided?

A: Many countries import whole products, higher than parts tariffs, this refers to the original tariffs. Now add, it will depend on whether there are these parts in the list, as far as 9405 is concerned about lamps and lanterns parts are also included, so it does not make much sense.

9, smart lights exported to the United States, is it the lamps and controllers separate duty calculation?

A: This depends on the specific situation of the product, the lamp part and the drive part are separated or integrated.

10. Would you please make a forecast of the 200 billion bill policy, from discussion to implementation, and how long will it last after implementation, accompanied by Trump's tenure?

A: This problem involves not the lighting industry, but the whole Sino US relationship. As for whether the 200 billion yuan tax will be levied, it will not be confirmed until early September. How long it will last depends on the relationship between China and the United States. As a whole, it is uncertain.

11. Can the Chinese Photographic Association appeal on behalf of the lighting industry, such as the tax exemption granted by the medical industry in the United States?

A: CCPIC has no such plan yet. If you have any opinions in this regard, you can react to China Chamber of Commerce on Mechanical and Electrical Imports and Exports through us. They have plans to do this, they will have representatives to attend a hearing in the U.S. Trade Representative's office, and he will give feedback on behalf of Chinese companies.

12. As far as you know, if the list of 200 billion yuan is implemented, will China still be competitive internationally?

A: It depends on specific needs and market competition. Prior to the increase, the price-performance ratio of Chinese products is very competitive. After the increase, the competitiveness will certainly decline. From the point of view of the U.S. market, consumers can still accept, there is no alternative to China's products, after the imposition of tariffs or the American people to pay.

13, Will Mexico become a country with the transfer of lamps and lanterns?

A: there will be some, but only part of it. Only some enterprises in the United States have set up factories in Mexico. Similarly, some problems have arisen in the NAFTA. Trump, Mexico and Canada are also talking about whether the free trade area will continue, but certainly not 25% more than China. Some products will be produced in Mexico, but Mexican products are not enough to meet the needs of the U.S. market. It will increase the share or raise the share.