Electrical Equipment / Components & Telecoms

Easy trade to find Huacheng foreign trade mailbox! The United States has imposed additional tariffs on Chinese goods exported to the United States in three rounds and five times under the "Section 301". In particular, the second round of additional tariffs in 2018 had a greater impact on my country's lighting industry exports to the United States. LED products cover a wider range, including more than ten kinds of LED and lighting products, in addition to incandescent light sources (HS code: 853922 and 853929, etc.) and LED replacement light sources (HS code: 85395000) and other products , The tariff list covers most of the lighting industry-related products, and the total export value of these lighting items covers about 75% of China's lighting exports.

Easy trade to find Huacheng foreign trade mailbox! The US market plays a pivotal role in my country's export of LED lighting products. From the perspective of the overall export value, the United States is the largest market for my country's LED lighting product exports, and also ranks first in the export of various types of LED lighting products; from the point of view of the export destination of a single enterprise, my country's LED lighting product exports The top 10 companies export a large proportion to the US market, and some companies even exceed 90%.

Easy trade to find Huacheng foreign trade mailbox! July 2019 was the third month when the second round of tariffs imposed by the United States on China took effect. The total export value of China’s LED lighting products this month was US$2.588 billion, down 8.4% year-on-year and up 6.0% month-on-month. In 2019, the cumulative export value totaled 15.81 billion US dollars, down 4.5% year-on-year, mainly due to the relatively sluggish demand in the LED lighting market, the weak overall export growth, and the replacement market approaching its peak.

TOP10 export enterprises

The export value of the top 10 companies this month totaled 182 million US dollars, accounting for 7.0% (year-on-year CR10 was 6.9%). The concentration of the entire export industry is still low, and the competition is very fierce. The top three export rankings are still Zhangzhou Daxin, Zhejiang Hengdian Debang and Xiamen Sunshine Ennei. Among them, Zhangzhou Daxin, which ranks first, has an export value of 44.81 million US dollars, accounting for 1.7% of the overall export. Its main exporting countries are the United States, Germany, Japan, Egypt and France. Wall lamps (38.6%), LED lighting (9.5%) and LED tubes (7.8%). In terms of products exported to the United States, the export value of Zhangzhou Marsh fell by 9.8% year-on-year, Hengdian Debang fell by 22.4% year-on-year, and Sunshine Ennai fell by 60% year-on-year. The decrease in the amount of exports to the United States is mainly due to the fact that some related manufacturers exporting to the United States had different degrees of concentrated impulse measures before the implementation of tariffs last year. By the first half of 2019, the US market was still in the stage of inventory digestion.

TOP10 export single product

The export value of the top ten single products this month totaled 1.972 billion US dollars, accounting for 76.2% of the overall export; from the perspective of export sub-products, the export value of bulb lamps was the largest in July, which was 396 million US dollars, accounting for 15.3% of the overall export. It is sold to the United States, France, Brazil, Poland, Russia and other countries, of which the amount of LED bulbs sold to the United States is US$90.85 million, down 25.5% from US$122 million in 2018. As the most commonly used alternative light source, the US market is far from meeting its own needs by relying only on its own manufacturing capacity. It basically depends on importing a large amount from China, so it is still the main export item; LED automotive lighting is a niche product. In the market, in the past two years, major LED manufacturers have deployed, and the export value of LED auto lamps has reached the top three; affected by real estate regulation, indoor lighting such as ceiling lamps and chandeliers are under great downward pressure in the domestic market, which has instead prompted LED companies to Seeking development opportunities abroad, so the export value ranks high.

TOP10 export destination countries

The export value of the top ten export destination countries this month totaled 1.346 billion US dollars, accounting for 52.0% of the total; the top three export destination countries were the United States, Germany and the United Kingdom, of which the value of exports to the United States was 618 million US dollars, down 10.8% year-on-year. The main reasons are: inventory pressure, the suppression of market demand after the price increase of local lighting manufacturers in the United States, and the transfer of some new orders to non-Chinese manufacturers. However, the value of exports to the United States accounted for 23.9% of the total. The United States is still the most important export destination for Chinese LED lighting products, far ahead of other countries/regions, and the proportion of exports to other countries/regions is below 5%.

Enterprise strategy choice

Easy trade to find Huacheng foreign trade mailbox! On September 1, 2019, the first batch of additional 15% tariffs imposed by the United States on the US$300 billion of Chinese products exported to the United States was officially implemented. The third round of tariff lists included more than 3,800 HS codes, basically covering all Chinese exports. Beautiful lighting products. In the context of deepening Sino-US trade frictions, what are the options for LED lighting exporters?

1. Product entrepot trade

Under the Sino-US trade friction, LED lighting products that are included in the tariff list by the United States can be shipped to countries or regions where the United States does not impose tariffs on such products through entrepot trade, and complete the "transformation" here. Then, after removing the "Made in China" label, it is shipped from these countries to the United States. For example, Hong Kong, as a free trade port with a superior geographical location and strong throughput capacity, undertakes a large amount of entrepot trade. For LED lighting exporters, this move will increase some transit costs. In addition, this measure also has certain risks, as follows:

2. Seek alternative markets

When the export to the US market is not ideal, other alternative markets can be sought. Other markets worthy of attention include Europe, which has the same size as North America, especially Western European countries such as Germany, Britain, France, and the Netherlands, which have always been excellent, and emerging emerging markets such as Poland, which is growing rapidly. countries, as well as the rapidly developing ASEAN and Middle East markets.

3. Overseas investment to set up factories

As the Sino-US trade friction intensifies, many companies in the industry intend to set up overseas factories in countries such as Vietnam and India. For companies with deep pockets, the move may be a proven approach, for SMEs there are more uncertainties.

4. Enterprise self-improvement

LED companies are struggling both internally and externally, and at the same time facing the pressure of domestic overcapacity reduction and the international Sino-US trade war. On the one hand, domestic enterprises should avoid malicious price competition, avoid blind expansion, pay attention to profits, and deal with the overall situation of continuous relative downturn with a healthy state; Transformation, from quantitative advantage to quality advantage. Easy trade to find Huacheng foreign trade mailbox!