Tariffs Reducing China’s Share of US TV Imports by More Than Half From 2018
Nearly 70 percent of TV sets imported to the U.S. in November originated in Mexico, a stunning turnabout from a year earlier when only a third of TV imports came from south of the border, said new Census Bureau import data accessed Friday through the International Trade Commission’s DataWeb tool. November was the third full month that 15 percent List 4A Section 301 tariffs were in effect on finished TV sets from China, causing profound shifts in TV-sourcing trends.
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The U.S. imported 3.66 million TVs from all countries in November, a 22.3 percent decline sequentially and down 40.8 percent from November 2018, said DataWeb. Unit imports for 2019's 11 months declined 4.5 percent year on year to 37.43 million sets.
That the total customs value of TVs imported to the U.S. in 2019's 11 months declined only 1.3 percent to $11.48 billion when unit imports were down 4.5 percent reflected the industry’s strong shift toward larger screen sizes commanding higher average value per set. Vendors told us before CES that 2019 factory sales through Q3 of TV screen sizes 70 inches and larger were up 72 percent from a year earlier.
Mexico generated 69.5 percent of the TVs imported to the U.S. in November, said DataWeb. Mexico’s November share, up 1.6 points from October, was roughly double its 35.2 percent share in November 2018, when China was still the dominant country of origin for U.S. TV imports.
Tariffs on finished sets from China changed those dynamics in a big way, said DataWeb. China had 27.4 percent of all TV imports to the U.S. in November, roughly flat with October’s 27.6 percent, but less than half its 60.4 percent November 2018 share.
China is increasingly concentrated on the smallest, cheapest TVs commanding less average value per set than the Mexican counterpart, said DataWeb. November Chinese TV imports to the U.S. were worth $162.87 in average customs value, 5.9 percent lower than in October and 10.6 below the November 2018 average.
Commoditization also struck TV sourcing in Mexico, though the country remains a haven for more premium sets, said DataWeb. Mexico exported 2.54 million TVs to the U.S, in November worth $402.34 in average customs value. Though that was nearly 2.5 times more costly than the average Chinese product, it was 12.9 percent below the $461.99 value of the average Mexican TV imported to the U.S. in November 2018.
November Chinese TV imports to the U.S. were worth $162.97 million in customs value, a 27.6 decline from October and 28.9 percent lower than in September, the first month the tariffs were in effect, said DataWeb. Consumer Electronics Daily estimates U.S. importers sourcing TVs from China faced $34.39 million in Section 301 tariff exposure in September. We estimate they reduced that to $33.78 million in October and $24.45 million in November by shifting production elsewhere, mainly to Mexico.