Country of origin has gone from being something that is a relatively obscure part of a product’s profile to become a factor that has a major competitive impact.
That’s the assessment of Ted Romanowitz, principal analyst at Futuresource Consulting, following yesterday’s announcement by US president Trump of new tariff policies.
Trump’s announcement included steep tariffs for China (54%), Vietnam (46%) and Taiwan (32%).
In comments shared with AV Magazine today, Romanowitz said: “As a former pro AV product manager, country of origin has been a relatively obscure part of a product’s label.
“With Trump’s tariff announcement, county of origin now has major competitive impacts.
“Depending on origin, an import into the USA has broadly different cost implications, providing significant relative advantages to some.”
He added: “The day after tariffs in America will certainly involve supply chain meetings with sales executives at every brand discussing company policy and how to manage the uncertainty moving forward.
“With gross margins on pro AV products being what they are, brands aren’t able to absorb the import tariffs.
“The USA sales channel and end customers certainly won’t be keen for price increases, in particular for products already purchased and en route.
“Wouldn’t it be intriguing to listen in as each brand navigates its way forward in these uncertain times?”
Romanowitz has conducted extensive research into the impact of tariff policy changes on the LED supply chain, published by Futuresource Consulting late last year.
He also took part in a Futuresource Consulting Future Sessions video series episode released this week, sharing his fndings with Futuresource managing director Chris McIntyre-Brown.
Romanowitz’ research coverage includes the following issues:
- The regional impacts of trade conflicts and tariffs: The effects on the key markets of the USA and Americas, China, APAC and EMEA.
- The brand responses to tariff challenges: Why brands aren’t absorbing incremental costs, passing them onto customers, leading to major shifts in manufacturing strategies.
- Out-of-China (OOC) and Out-of-Tariff (OOT) strategies: How the key players are adapting, including Daktronics (Ireland), Samsung, LG and Sony (Mexico), Leyard and Samsung (Slovakia), and Unilumin (Vietnam).
- Supply chain diversification: How leading brands are strengthening their supply chains through second-sourcing components and geographic diversification to mitigate disruptions.
- The impact of the LED technology transition: The shift from packaged (SMD, IMD, MIP) to unpackaged (CoB, CoG) solutions, including the expected cost declines and the long-term implications for global supply chains.
To view the Future Sessions video on the impact of tariffs, click here.
