Hold Your Applause: Tariffs Are Still High

While Americans let out a collective sigh of relief this week as news spread that President Trump and China’s President Xi Jinping would be lowering the amount of the tariffs levied against their respective countries, manufacturers and retailers in the lighting industry were less jubilant than the average consumer.

As a news headline, the mutual lowering of tariffs sounds great — and it is good news. However, there are quite a few concerns swirling around the lighting industry. Showrooms wonder if recent factory price hikes attributed to the tariffs will be rolled back to pre-Liberation Day levels. Manufacturers who source from China and who have delayed or cancelled shipments are trying to gauge whether this tariff pause will become permanent or if it’s just a brief respite before another tariff increase is announced.  

Lighting News Now has heard from manufacturers who had shipments “on the water” before April 9 and paid a partial tariff increase (saving them from passing on the full tariff amount to showrooms) when the boat finally arrived at the port, as well as from companies with shipments that arrived after April 9 that they had to pay the highest tariff rates on and now they are attempting to figure out how to price these products accordingly and in a way that is fair to all parties.

Showrooms have had the burden of telling customers who ordered lighting fixtures in January or earlier for their newly constructed homes that their merchandise has arrived (great news), but now will cost more than they budgeted for (bad news).  Showrooms are having to spend an inordinate amount of time updating pricing at all points of sale (hangtags in the showroom, prices listed online, and quotes for jobs) at the risk of annoying consumers and specifiers who want to know exactly how much a particular lighting fixture they are interested actually costs.  As a result, some showrooms are advising customers that a price given today is only valid for several days due to the volatility of tariffs.

What most of the consumer public forgets – but many savvy lighting folks do not – is that even before the new tariffs in February and April, there have been tariffs on China in place since the first Trump administration. According to various media outlets, even if the April tariffs are permanently cancelled, the new tariff for products originating in China is 54% — and that is still high enough to deter many end-consumers from making lighting purchases and can influence a specifier’s lighting choices for a particular hospitality or commercial job.  

Then comes the issue with Canada. The Canadian tariff is not part of this new agreement, so retailers ordering from Canadian manufacturers who ship from their headquarters will still have to pay the Canadian tariff along with the just-reduced China tariff. For showrooms that typically order from Canadian manufacturers at Lightovation and other shows or through the manufacturer’s rep network, this remains a significant problem. Plus, if a showroom orders from a Canadian manufacturer and half of the order is fulfilled from the company’s U.S. warehouse and the other half comes from inventory at the Canadian headquarters, those identical products for the same order will be priced differently.

Now for some good news: there are a number of manufacturers (Innovations Lighting, Crestview Collection, and SDQ Lighting, among others) who did not increase prices after the April tariffs and they report that they will continue to keep their pre-tariff pricing as long as nothing else changes.

In response to this week’s announcement of the 90-day tariff pause, some companies that had recently announced tariff-related price hikes – such as Eurofase and Elegant Lighting – just informed customers that they will be updating their price lists shortly to reflect the tariff reduction.    

With Lightovation just one month away, discussions between manufacturers and showrooms will be different from any market prior. Fortunately, manufacturers are committed to helping their customers navigate the economic challenges ahead. These are tough times for everyone in the lighting industry and the hope is that everyone can pull together to work out equitable solutions.