(Part 1 of 3)
Tariffs imposed by the Trump administration have caused uncertainty to take hold at many U.S. companies, including power transformers and the PowerVolt Group (PowerVolt, Ensign and Wabash Transformer).
According to an article1 at Power Transformer News (www.powertransformernews.com), “The new tariffs could impact heavily upon domestic transformer manufacturers, who rely on a steady supply of the two metals. The U.S. is the world’s greatest steel importer, although it does not produce enough domestically to meet demand, meaning higher metal costs are likely.”
In addition to steel and aluminum, electronic connectors, harnesses, and assemblies from China are also subject to a 25 percent tariff.
An Oct. 28 CNBC story2 by Lori Ann LaRocco explains the impact tariffs are having on transformers. “The effect of the first round of tariffs can be seen by looking inside the Chinese containers being exported to the U.S. According to Ocean Trade Database, the amount of traded goods included on the $34 billion tariff list dropped 21 percent in July from the year before. For example, the number of transformers imported in July 2018 was 60 percent less than imported in July 2017.”
Tariffs are clearly impacting transformers coming from some overseas locations, especially China. In addition, companies that manufacture transformers and rely heavily on overseas materials and components are also being impacted. Don’t be surprised if your transformer manufacturers that import parts or materials from overseas, especially China, have already or will be passing along the costs to you.
The latest round of tariffs announced in June 2018 (section 301, list 3), will impact power transformers. The first installment will apply a 10 percent tariff on imported power transformers starting Sept. 24, 2018. The second installment on Jan. 1, 2019 includes an additional 15percent tariff on imported power transformers (a total of 25 percent as of Jan. 1, 2019).
Other Tariff Related Wabash Articles:
- Part 2 of 3 (How to Find the Best Transformer Partner to Mitigate Tariffs?)
- Part 3 of 3 (How the PowerVolt Group Can Help Eliminate Tariff Uncertainty.)
“China tariff effects started showing up in shipping data months ago,” Oct. 28, 2018, com (https://www.cnbc.com/2018/10/26/china-tariff-effects-started-showing-up-in-shipping-data-months-ago.html)