As you may be aware, a tariff increase up to 25% went into effect on May 10th on approximately $200 billion worth of Chinese imports.    The President also ordered the start of the process of raising tariffs on ultimately all remaining imports from China, which is an additional $300 billion.  (see press release at https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/may/statement-us-trade-representative ) This increase will impact pricing on many categories of Audio, Video, & Lighting products.

 

With a clear and level head, and a bit of communication we can certainly get through this.  Below are some things that you should be aware of and may help you avoid frustration in the near future with the impending changes:

Each manufacturer is handling the tariff differently.  Beware that large project quotes with multiple manufacturers may be affected a number of times as each rolls out their new pricing plan.  Some brands may choose to spread the impact across their entire line of products, while others are looking more specifically at what products are being directly impacted and pricing items based on that amount.

Expect the unexpected.  As the impact of the tariffs are being considered by each brand, some other inconveniences might occur as a result.  Plan for possible shortages on popular items and potential delays on incoming stock replenishment.

Communicate with your customers–On both current short-term and long-term projects in the pipeline.  We hope that everyone is watching the news, but maybe they aren’t.  Non-industry customers and end-users may not be focused on the tariffs affecting their upcoming installs, but more on how it might affect the cost of their new TV or tablet for their home.  Make sure they know that there is an upcoming period of pricing flux and increases, so they won’t feel blindsided  when they make the decision to move forward.

Pricing protection?  Many manufacturers that will be heavily impacted are not offering pricing protection.  The tariffs have been a hot topic over the last 6 months and they figure that we have all had sufficient notice of what is to come.

Consider warehouse stock. Have something (or a number of things) you can’t live without?  Items repeatedly specified for multiple jobs, or a customer trying to standardize and part-way through the process in your contract?  You may want to consider either increasing your current stock of those items, or possibly adding them to warehouse stock.  Your company would have to make sure the benefits outweigh the costs, but knowing you can deliver certain items on time and at a level cost may be worth the investment.

BAA.  We have to mention the Buy American Act.  Consider changing your options to those that are made in America, or assembled in America using only small portions of other goods if possible.  These goods should see little to no price increase due to the tariffs.  In some cases, they are easy to identify and source, but other product categories will definitely prove to be a challenge.

Communicate with your BAI Sales Team–or other supplier contacts.  If you have a project you know is coming in the near future, please let us know ASAP.  We can recommend BAA products if available, help keep you informed on pricing updates,  and other changes that may affect your quote and potentially your bottom line.

Plan for change.  It’s one of the constant things in life, right?

 

For official tariff info, please go to: https://ustr.gov/

Contact BAI at 888-224-3446

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