The new punitive tariffs, feared not only by the digital signage industry, were announced by the US President on Wednesday. Imports into the US will be subject to different tariff rates, depending on the product category and country of origin. In the American digital signage market, the tariffs will result in dramatically increased prices.
The new punitive tariff regime on hardware is complicated, and the justifications are not always easy to understand. In principle, the Trump-led US government is imposing 10% on all countries plus additional reciprocal tariffs. This brings tariffs to a level not seen in almost 100 years. Software and services will not be subject to additional taxes.
The tax rates relevant to the digital signage industry are:
- Mexico (-%) – Many display manufacturers such as Samsung and LG produce TVs and professional displays here. Mexico and Canada were spared from the universal tariff. Goods from the two countries that comply with the 2020 trade deal they signed with the US will remain exempt from tariffs.
- China (54%) – The greatest impact on the digital signage industry, as a large proportion of all electronic products such as media players and LEDs are manufactured in China.
- Vietnam (46%) – The second most important manufacturing country for electronics such as Samsung The Wall or Brightsign media players.
- Taiwan (32%) – Many displays are produced in Taiwan, but semiconductors are exempt from punitive tariffs.
- Korea (25%) / Japan (24%) – Even though Korea and Japan are home to many major industry providers, hardly any relevant digital signage products are still manufactured here.
- EU (20%) – Less relevant as a manufacturing location, with the exception of premium LED solutions that are exported to the USA with the “Made in EU” label.
Manufacturers will now try to adapt their production networks to the new tariff levels and find loopholes in the system. For professional displays, Mexico’s exemption from punitive tariffs is the only good news.
Almost all hardware suppliers have replenished their US warehouses since the beginning of the year, so significant price increases aren’t expected to happen in the first few weeks. In the medium tem, however, prices are expected to rise dramatically.
