Kele Can Help You Plan for Tariff Impact

Update — September 28, 2018: On Sept. 17, the Trump administration announced a new 10 percent tariff on an additional $200 billion of Chinese imports. The tariff became effective Sept. 24 and will increase to 25 percent on Jan. 1, 2019. The list of affected product types grew to nearly 6,000. Read more at the links below:

United States Trade Representative announcement

Final tariff list


August 31, 2018: The 25 percent tariff on Chinese imports could have far-reaching implications across the BAS industry. Enacted by the United States Trade Representative (USTR) in July and August, the tariff was imposed on $50 billion of products imported from China. The tariff may expand to an additional $200 billion of Chinese imports in the future.

The list of product types subject to the 25 percent tariff grew in August to more than 1,000, including products in the manufacturing and construction industries. However, the full tariff-related dollar impact on a product depends on whether it is a finished good or a component. Finished goods will be hit with the highest tariff.

Affected products can be identified via a Harmonized Tariff Code, and manufacturers have begun the process of confirming the country of origin of their related lines. How cost effects are being handled varies by manufacturer. Some are taking a “wait-and-see” approach while others are adjusting list prices and/or adding a surcharge based on the tariff impact. List price increases and surcharge amounts also vary.

What does this mean for BAS contractors and their customers?

Essentially, cost increases on numerous products for the duration of the tariff. While unknowns exist, many suppliers will begin or continue passing along tariff-driven costs over the coming months. This introduces the potential for mid-project material inflation and the inherent hassle of managing that with your customers.

Kele can help you mobilize now! Here’s how:

  • Products already in stock at Kele will not be subject to tariff-related increases.
  • If you need products that will be affected by the tariff in the future, Kele can source these products now to avoid a cost increase.
  • Kele can also help you select alternative parts from more than 400 suppliers.
  • If bidding on a project, Kele can help plan, source, organize, and ship the right products.

With more than 1.8 million parts in stock—including a variety of Kele-branded parts—we will find a solution that helps you keep winning. Contact Kele today!

What you need to know:

  • USTR recently imposed a 25 percent tariff on $50B of products imported from China. More tariffs looming.
  • Impact varies by product. Finished goods will receive the highest tariff.
  • BAS manufacturers handling differently—some with list price increases and/or surcharges.
  • Total impact on BAS contractors unknown, but cost increases will hit.
  • Kele can help you plan and source products before the tariff takes full effect.

 

Helpful tip:

Tell your customers. Proactive communication is key. Be sure they know how the tariff may affect them. And assure them you are planning now to reduce the impact.

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