AudioControl CEO Blasts Tariffs as Hurting US Manufacturing, Competitiveness

Though the comments period that expired Friday in that docket was for filing requests to appear at Aug. 20-23 public hearings on the 6,031 tariff lines proposed for 10 percent duties in an Office of the U.S. Trade Representative July 10 notice (see 1807110034), Camara commented despite having no plans to testify, he emailed us Friday. He said AudioControl is coordinating its opposition to the tariffs with CTA, of which it's a member, and which does plan to testify.

AudioControl, which markets high-priced amplifiers, preamp processors and Dolby Atmos AV receivers, employs 50 workers at two Seattle-area factories that manufacture specialty audio products in the U.S. for the company’s global markets, said Camara in his comments. Adding “high tariffs” on Chinese-sourced components and parts will raise AudioControl’s bill-of-material costs, making the company “less competitive” with rivals that “simply import finished products” from China, he said. “We import parts from China and other countries as well as sourcing parts locally.” He called it a “purchasing strategy that has served us well” in building a “successful US business” that this year is celebrating its 40th birthday.

The tariffs enacted July 6 and proposed in two additional rounds of duties “will have an unintended consequence on many US electronics manufacturers and also our US suppliers,” said Camara. AudioControl hires a local contractor to do printed circuit board “stuffing and manufacturing,” he said. “That the components that they use will now face tariffs in their US manufacturing plant has the consequence of increasing their pricing to their US manufacturing partners,” he said. Camara wasn’t specific on the Harmonized Tariff Schedule product codes he wants to see excluded from the duties, but “printed circuit assemblies” and their various components, parts and materials heavily populate all three tariff lists released June 15, June 20 and July 10.

Though AudioControl has no plans to testify, “we spoke with Sage” but are “not talking publicly about this,” emailed Camara, referring to Sage Chandler, CTA vice president-international trade. Chandler, who testified against the tariffs at the first two USTR hearings (see 1807240005), filed a request Friday to appear at the third round of hearings Aug. 20-23. CTA member companies identified 302 tariff lines in the USTR’s July 10 notice, accounting for more than $109 billion in value, for which 10 percent duties “would be detrimental to their business,” said Chandler in her filing (see 1807300002). CTA is still counting the impact on members, and those numbers may need to be "updated" when written comments are due Aug. 17, she said.

The tariffs that are enacted or proposed affect "many sectors,” Camara told us. “We are highlighting the issue of our US suppliers that manufacture in the US and have little alternative but to source currently from China and therefore are impacted, as we also may be, from the tariffs.” For “many industries,” including U.S.-based electronics manufacturers like AudioControl, if a tariff is imposed on a part, component or “some other material” sourced from China that’s used in a U.S.-manufactured product, it’s the American producer that’s “at risk from higher manufacturing costs,” not the Chinese companies that the Trump administration is trying to punish, he said.

If tariffs that are imposed remain in effect long term on Chinese-sourced parts and materials, “clearly we would need to look at alternative supply chain options,” Camara told us. When we informed Camara that USTR Robert Lighthizer told a Senate subcommittee hearing last week that he didn’t necessarily see the tariffs remaining “in place for years” (see 1807270018), Camara quipped: “Good to see there is a light at the end of the tunnel, although the actual light bulb or light fixture is probably tariffed!!” Camara’s hope, "seriously," is that “there will be enough voices making it clear” that there are “real economic issues at stake" with the imposition of tariffs, and "we should not be playing politics!” he said.

On Camara's joking that duties likely would be imposed on the light bulbs giving hope for tariff relief at the end of the tunnel, that's not exactly the case in the technical sense, according to Ledvance comments posted Friday. The global lighting company argued for removing proposed tariffs on the components it sources from China to manufacture LED light bulbs in the U.S. for sale in North America under the Sylvania brand it licenses from Osram, “Ironically, finished light bulbs imported from China are not subject to additional tariffs,” said Ledvance. “Therefore, under the proposed tariff scheme, it would be cheaper to import light bulbs directly from China, putting our US manufacturing at a significant disadvantage.”