How the Tariff Trade War Impacts the Elevator Industry

July 19, 2018
2 min read

On June 15, President Donald Trump, along with the Office of the U.S. Trade Representative (USTR), released the administration’s final list of Chinese products subject to tariffs. Included are elevator and escalator parts and components, including sheaves, motors and machines. In imposing tariffs on $34 billion worth of Chinese imports, the Trump administration says it is hoping to strike a blow against long-standing abusive trade practices by the Beijing government. Unfortunately, the tariff trade war has also struck a blow to the elevator industry.

The NEII (National Elevator Industry, Inc.) submitted testimony in May voicing concerns and recommending that several elevator- and escalator-related subsections be excluded from the list, stating that the tariffs would harm supply chains, decrease competitiveness in the industry and force additional costs onto U.S. customers.

Many companies that will feel the tariffs’ impact are not Chinese but US firms that do part of their manufacturing in China. A lot of manufacturing these days relies on vast, interconnected supply chains that may cross borders several times. For example, there are many companies in the United States manufacturing elevators using some low-tech parts that are made in China, which are then brought back into the U.S. for final assembly and sold all over the world.

Consumers know about the mass amounts of goods imported from China into the U.S., such as televisions and clothing, but what consumers are not aware of is that 60 percent of all the trade between the U.S. and China actually takes place through multinational supply chains.

The USTR plans to let companies apply for individual-product exemptions, and NEII said its government-affairs team would work with companies that wish to take part in the process. For now, elevator manufacturers will have no choice but to pass on part of the extra costs to its customers.

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