List 4 Tariffs on LCD TV Panels Would Render Carolina Plant ‘Uncompetitive,’ Says Element
Element Electronics, as it did successfully last year, again is floating the threat of job losses in South Carolina in a strategy to defeat the proposed List 4 Section 301 tariffs of up to 25 percent on the LCD panels and printed-circuit assemblies it imports from China. Element is “the sole U.S. mass assembler” of LCD TVs, and tariffs would destroy its competitiveness against companies that import finished TVs from Mexico, it commented in docket USTR-2019-0004 in requesting to appear at the List 4 public hearings that begin June 17.
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Element produces about 2.5 million TVs a year at its plant in Winnsboro, South Carolina, “where it employs over 260 total workers and is one of the top 10 private employers in Fairfield County,” it said. Winnsboro is about 70 miles south of Charlotte, North Carolina. Walmart, Target and Costco are Element’s biggest retailers. "Element remains in 5th place in the unit brand share rankings so far in 2019," emailed NPD Vice President Stephen Baker Thursday.
The imposition of 25 percent tariffs on the goods Element sources at 4.5 percent duties under the Harmonized Tariff Schedule's 9013.80.90 and 8529.90.13 subheadings would render Winnsboro “uncompetitive” against TV makers that import finished sets from Mexico duty-free under the North American Free Trade Agreement, said Element. It would be “forced to close its South Carolina facility resulting in the loss of all jobs at the facility,” as it resorts to sourcing finished TVs from China, it said.
The List 4 tariffs, if imposed on LCD TV panels and components, would “result in a windfall for television producers in Mexico and a surge in imports from Mexico,” it said. Element argued successfully last summer along similar lines for the removal of HTS 9013.80.90 and 8529.90.13 goods from List 3 (see 1809200017).
TV imports from Mexico didn’t face the threat of tariffs then as they do now (see 1906030041). “We’ve told Mexico the tariffs go on,” President Donald Trump told reporters Thursday. “And I mean it.” Mexico needs to “step up to the plate” and solve the influx of migrants through the southern border, said Trump. “Perhaps they will. We’re going to see. They can solve the problem.”
Making permanent the temporary “tariff suspensions” on flat panels and assemblies that Element imports from China is “vital” to the workers who assemble finished LCD TVs in South Carolina, Element told the International Trade Commission in April (see 1904260021). The 4.5 percent duties on LCD TV components Element sources under the 9013.80.90 and 8529.90.13 tariff lines were temporarily suspended in the Miscellaneous Tariff Bill Act that Trump signed into law Sept. 13 to promote U.S. production at companies that rely on small-volume imports,
Since there is "no specific HTS code for healthcare grade televisions," the large-screen, wall-mount TV displays that PDi Communication Systems supplies to hospitals and nursing homes are "lumped in as part of the larger consumer television market," commented the manufacturer in the same docket as Element. PDi wants to testify at the public hearings to "personally deliver our message" that the proposed List 4 tariffs on HTS 8528.72.68 and 8528.72.72 displays from China "will impose great economic harm to our business," it said.
Absorbing the cost increase of 25 percent tariffs is "unacceptable as it drives our wall-mounted products into negative margin," said PDi. "We have looked to assemble the wall-mount televisions" in Springboro, Ohio, where PDi is based, "but we will still be impacted at 25% from the raw materials," it said. "Setting up a supply chain cannot be done instantly. It has taken years to establish the partnerships that we value so much." The wall-mount TVs are "sourced and assembled in China to PDi's design," it said.