Tariffs, the Lighting Industry and My Predictions
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Editor’s Note: If you’re a luminaire manufacturer and have decided to absorb or pass on tariff costs, let us know your approach ([email protected].)
While this column typically avoids political topics, sometimes they are impossible to ignore.
In 2017, your humble editor stood before 300 Chinese LED manufacturers at the GGLED conference in Shenzhen. The topic? Tariffs, the lighting industry, and the possibility of then-newly elected President Trump imposing tariffs on China. My take? “Not likely,” I confidently declared.
Needless to say, I’ve not been invited back to the conference.
What We Know
On Saturday, President Trump signed an executive order imposing significant import tariffs from Mexico, Canada, and China. Here’s a breakdown of the changes:
- 25% tariff on Mexican and Canadian goods
- 10% tariff on Chinese imports
- A special 10% rate on Canadian energy imports
These measures aim to address issues such as illegal immigration, drug trafficking, and trade imbalances. However, they have already triggered strong reactions from key trading partners.
How Canada and Mexico Responded
Canada and Mexico wasted no time in fighting back.
- Canada: Prime Minister Justin Trudeau announced retaliatory tariffs on $107 billion worth of U.S. products. He also encouraged Canadians to support locally-made goods, warning that U.S. tariffs put key industries at risk and could drive up consumer prices. On Sunday, Canada published their list of products from the United States subject to 25 percent tariffs effective February 4, 2025. Luminaires are on the list.
- Mexico: President Claudia Sheinbaum called the tariffs unjustified and warned of potential economic damage to both nations. She emphasized that Mexico remains open to dialogue but will take necessary steps to protect its economy.
My Take
I believe that inflation played a major role in President Trump’s election win. Ironically, these tariffs will likely worsen the problem. On Sunday, Trump seemed to acknowledge this economic gamble, posting on Truth Social: “THIS WILL BE THE GOLDEN AGE OF AMERICA! WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!).” For President Trump to publicly acknowledge pain tells me he is feeling a bit of pressure. Also, late Sunday, the Dow futures were down 1.4%, or over 600 points, while S&P 500 futures dropped 1.9%. The Nasdaq Composite futures were down 2.4%
What Happens Next? My Predictions
- The 25% tariff on Mexico: After a few minor concessions, President Trump will declare victory and remove it.
- The 25% tariff on Canada: Negotiations will likely drag on longer as President Trump pushes for bigger concessions.
- The 10% tariff on China: This one will likely stick.
That said, my 2017 prediction didn’t age particularly well—so let’s just say I’m cautiously optimistic (or optimistically cautious).
Developing…
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