Proposing LCD Panel Tariffs Must Be Trump Administration ‘Mistake,’ Says Element
Element Electronics said it's flummoxed by the Trump administration’s proposal to impose 25 percent Trade Act Section 301 tariffs on the LCD panels Element sources from China to assemble TVs at its Winnsboro, South Carolina, plant. The tariffs endanger the factory’s survival, David Baer, the company’s general counsel, told an Office of the U.S. Trade Representative public hearing Aug. 21 on the proposed levies, according to a transcript released Friday. Baer “can't find any way to interpret what the administration is proposing other than it's a mistake or unintended result and will promptly be fixed through this hearing process,” he said.
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If the administration’s plan to impose tariffs on LCD panels wasn't a mistake, the “alternative is that the government has targeted Element's factory for closure, and that makes no sense at all,” said Baer. His testimony was less confrontational than comments he filed in July when he spared few punches blasting the USTR’s “galling” trade policies that he said would push Winnsboro to extinction because tariffs would force Element to source finished TVs from China (see 1807200056).
The U.S. TV market annually numbers in “the tens of millions” of units, Baer told the hearing. “There is only one mass producer of TVs in the world that does it here in America,” he said. “It's Element. So the only TV company in the world that is the subject of these proposed 301 duties is the only company producing TVs in America. Think about that.”
There exists “no other place” except China for Element to procure the LCD panels and motherboards it needs for the sets it assembles in Winnsboro, said Baer. “All of our parts originate there.” Even TVs that are assembled in and imported from Mexico “contain products that originate in China and are assembled in Mexico only to achieve duty-free entrance into the U.S.” under the North American Free Trade Agreement, he said.
The LCD panel producers that Element sources from “are all in China,” said Baer under questioning from Patent and Trademark Office attorney Benjamin Hardman about whether Element has looked to source panels elsewhere. Of the “five or six” LCD fabs throughout the world, “all of them” are based in China, said Baer. “There's been an announcement that one's going to be moving here to the U.S., but by all public reports, that's five years out,” he said in obvious reference to Foxconn’s plans to build an LCD fab in Wisconsin. “So the infrastructure to create a panel fabrication facility to create the LCD panel assemblies that we have to import for our supply chain are really only available in China.”