Industry Braces for Tariff on Speakers

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12 Volt Tariffs

With President Trump declaring he will launch new 10 percent tariffs on more Chinese goods (including speakers), car audio suppliers are preparing for the shift.

Trump said the new tariffs would arrive next month.  Even if there is a last-minute reprieve, the continued back and forth in negotiations with China is leading economic observers to conclude the trade war will continue for months if not years, a prediction that car audio suppliers must factor into their pricing going forward.

JL Audio’s  Manville Smith said, “… the frequent changes to the tariff lists and rates make it challenging to plan our business. We have to assume that this trade war will continue for at least a year, and possibly several. Even with these challenges, we continue our commitment to build speakers in the USA. We’ve expanded our manufacturing capacity in Miramar, FL and are running multiple shifts to keep up with demand for our loudspeakers.”

Head of the Consumer Technology Association Gary Shapiro said, “Backing China into a corner is not helpful and will only result in retaliation, pitting China against the U.S. on other important trade and geopolitical issues.”

Kenwood, Kicker and Rockford said they had no comment at this time.

A leading car audio retailer, Custom Sounds, TX, said it was prepared for the price increase and welcomed it. “We think our customers are willing to pay more.  We’re more than willing to take a slightly shorter margin on promotional goods in order to have overall higher pricing,” said Mike Cofield.

China has already devalued its currency so its goods are cheaper and vendors are expected to absorb some of the 10 percent tariffs. As a result, he expects retailers will only see an increase of 2 or 3 percent. “So, if I get overall higher sales, who cares?”

A key pain point of the Trump tariffs continues to hurt US manufacturers of car audio goods, ironically, because they rely on parts and materials from China. Derek Schmiedl of NAV-TV said, “We don’t mine neodymium here because environmental law makes it more difficult.  And it makes it more difficult to mold plastics. As an American manufacturer, I applaud Trump trying to bring back manufacturing to the US, but I disagree in how he’s doing it.”

Smith said, “A 10% tariff on China-sourced loudspeakers is still lower than the 25% tariff on China-sourced loudspeaker parts and materials. This disparity continues to disadvantage U.S. loudspeaker manufacturers who source key parts and materials in China. Loudspeaker manufacturers in other countries are enjoying the biggest advantage from these tariffs, especially if they use China-sourced parts. This exposes an important blind spot in this trade strategy: products can be made in many countries, other than China and the U.S.A. “

JL Audio said it is working every angle to minimize the impact of tariffs on our customers.

NAV-TV reiterated it would not raise prices short of a global economic melt-down.

 

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