News story

Tariffs start impacting in USA

Wednesday, 18 July 2018 ( #881 ) - United States
Chinese imports are under fire
Chinese imports are under fire
By Allan Leibowitz
The United States last week introduced new tariffs on a range of imports from China, including forklifts and forklift parts.

Importers were warned of the measures earlier this year, but had hoped that the Trump administration would back down. Despite lobbying, the full 25% tariff is now in place.

Forklift importers like Noblelift are now running two price lists - one including the tariff and one without, covering the stock already landed.

"We will be raising our prices," says managing director Loren Swakow, who adds that existing stock will be sold at old prices.

LiuGong has implemented a tariff surcharge, but North America forklift division president Ken Biediger says the company is "absorbing the majority of the tariff".

Although there was some warning, it seems most importers were not able to stockpile inventory to avoid the impost.

"The notice of tariff implementation was too short to effectively stockpile inventory. Most of our orders in process were already sold," says Biediger. "Fortunately, we had a decent inventory level already in place."

While Swakow had flagged a push to land inventory in the US before the tariffs took hold, he says Noblelift North America was "not able to increase our stock as the other manufacturers did".

Of course, the tariff is no surprise to dealers. As Swakow explains, "This has been in the news for a while now (and) we were also sending out warnings and updates to the dealer network so they were not surprised when it went into effect."

"The response of our dealers has been very positive as they are thankful that LiuGong is bearing the majority of the tariff burden," says Biediger.

While not commenting on the specifics of Hangcha's strategy, Frank Russo, sales director of HC Forklift, notes that "tariffs, like increasing competition or any other disruptive factor, cause companies to rethink their marketing strategy which in itself is dynamic".

"Hangcha Ltd has seen such disruptions over the years and ... have grown and prospered (in spite of them). Our plans and goals are not changing: we will press on with more focus and determination."

LiuGong's Biediger is hopeful that the tariff will be a short-term measure. "The ITA (Industrial Truck Association) is actively lobbying the US Government to eliminate the tariffs on forklifts and promote free trade," he notes. "LiuGong is committed to supporting our American dealers in this difficult time and we will continue our efforts in this market despite the tariff."

Brian Feehan, president of the Industrial Truck Association, tells Forkliftaction News that the ITA has been "a long advocate for free and fair trade".

He cites a recent ITA submission to Washington which reinforced ITA's commitment to global trade negotiations through two principles: "The first is the elimination of all tariffs immediately, and the second is harmonisation of non-tariff issues through a transparent process."

The submission opposes tariffs and calls instead for "direct bilateral trade negotiations with China that would improve previous agreements by addressing fundamental issues relevant to China, including their industrial policy, state-favoured industries, transparency and IP protection".
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