Section 301 Tariff Mitigation Helped Company Navigate COVID-19 Disruptions, Electronics CEO Says
SVS Sound CEO Gary Yacoubian says his company was able to navigate COVID-19 supply-chain disruptions in China because “we built a lot of product in Q4 last year that was intended to be built in Q1 of this year.” SVS negotiated that with its Chinese factories, partly to mitigate the Section 301 List 4A tariffs, he said.
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“Weirdly, this also played to our strengths that we had product when others were not building,” Yacoubian said. “We’re doing fine as far as building product. I would say the ports are extremely bottlenecked. Getting things into and out of the ports and into our warehouses in the U.S. has been difficult.”
The Office of the U.S. Trade Representative rejected the two tariff exclusion requests SVS filed for its speaker and subwoofer imports from China. The company “failed to show” that the tariffs “would cause severe economic harm to you or other U.S. interests,” USTR's June 9 rejection said.
The 15% tariffs were “devastating” and “scary as hell,” Yacoubian said. With their rollback to 7.5% after the phase one U.S.-China trade deal took effect mid-February, “we’re just weathering it,” he said. “We didn’t raise our prices. We’re just doing the best we can. We are sucking it up.”