The trade war between the United States and China is expected to shoot up LED lighting items. The first tariff on LED luminaires by the Trump administration went into effect late 2018 with a 10% increase in tariff. This has become even more severe with a 25% increase in tariffs imposed on all LED shipments into the United States from January 1st 2019. This increase in tariffs will mostly affect lightings and furniture from China. Despite the tariffs, prices of LED luminaires are not expected to experience a sharp increase but a gradual change in price. Even though many electrical contractors purchased a good number of these LED related luminaires before the January 1st increase, their inventory is fast depleting and they will be met with a huge price gap.
As expected, there will be less-expensive products in the market with a corresponding lower quality. This increase in tariff will mostly affect US consumers as the tax burden will mostly be borne by the buyers. It is important to note that numerous electricals distributors and wholesalers are fashioning out ways to reduce the effect of the tariff on the supply of LED luminaires. Currently, 85% of LED lighting luminaires used in the United States are manufactured in China. Even though most of the manufacturers are American firms, their facilities are majorly located in China. For LED companies in Taiwan or other Asian markets, this could be an avenue to compete favorably with their Chinese competitors.