You're a So and So and a Currency Manipulator!
In the first three rounds of tariff wars our two heavyweights, Beijing and the Trump Administration traded barbs and blows, wreaking havoc on their own economies with no clear victor - or lasting truce in sight. In this latest tit-for-tat, The Trump Administration has recently announced an additional 10% tariff on $300 billion worth of Chinese imports, beginning September 1st. In response, China has devalued the Yuan to an 11-year low: (1 US Dollar now equals 7 Yuan). making the yuan more competitive with foreign currencies.
The Trump Administration seeing this as blatant currency manipulation (systematically tinkering with exchange rates in order to gain an unfair advantage in trade)has labeled China as such - in their obvious attempt to offset the impact of higher tariffs on Chinese imports coming into the US.
Are the Gloves Coming Off?
China warned on Friday that if the United States wanted to fight China on trade "then we will fight". And there's a number of 'weapons' at their disposal: We all know their dominant position in the rare earth supply marketand what would happen should they decide to weaponize this. They're also the American government's biggest creditor: in theory, Beijing could trigger a panic in bond markets by dumping some of the $1.1 trillion in US Treasuries that it owns. But Beijing knows that either move, despite the damage it would cause the US - could have devastating unintended consequences to their own economy.
A Blow Beneath the Belt, Right to Your Wallet
So, what products will be impacted by this 4th round of tariffs? Ready? Here we go: cellphones, laptops, toys, LED lamps, Christmas ornaments, microwaves, ceiling fans and video games (and more). But within these broad categories, there's a number of items directly related to the electrical industry:
HS Code Effective Product Description
8504.10.00 9/1 Ballasts for discharge lamps or tubes
8539.22.40 12/15 Electrical filament Christmas-tree lamps, of a power not exceeding 200W
and for a voltage exceeding 100 V
8539.22.80 12/15 Electrical filament lamps of a power not exceeding 200 W and for a voltage
exceeding 100 V nesoi, excluding ultraviolet and infrared lamps
8539.29.10 12/15 Electrical filament Christmas-tree lamps, designed for a voltage not
exceeding 100 V
8539.29.20 9/1 Electrical filament lamps, voltage not exceeding 100 V, having glass
envelopes n/o 6.35 mm in diameter, suitable in surgical instruments
8539.29.30 9/1 Electrical filament lamps nesoi, designed for a voltage not exceeding 100 V,
excluding ultraviolet and infrared lamps
8539.29.40 9/1 Electrical filament lamps, designed for a voltage exceeding 100 V, of a
power exceeding 200 W
8539.50.00 12/15 Light-emitting diode (LED) lamps
List 4A (Effective September 1, 2019)
List 4B (Effective December 15, 2019)
According to the American Lighting Association, "Lighting fixtures and traditional lamps, which have already been impacted by the 25% will not be further impacted." But there's the "all the rest": incandescent, LED lamps and ballasts that will be subject to the new 10% tariffs.