Before the trade war, where the lighting industry? |

North American companies express their concerns with a letter

In early July 2018, after threats and some skirmishes, the trade war between the two main economic powers of the world begins: China and the United States United has makes the world market his battlefield.

The lighting industry has a strong international presence. Trade fairs such as Light Fair in the United States, Light + Building in Germany and Guangzhou International Lighting Exhibition in China clearly show that light transcends borders. Therefore, in the trade war that has been unleashed and in which taxes are the main weapons, the lighting industry can come out unscathed from the shootings that have started between economic regions.

The United States National Electrical Manufacturers Association (NEMA), dated July 23 and signed by the President of the Kevin J. Cosgriff Association, was addressed to the North American Trade Representative, Robert Lighthizer, and in which the concerns that companies have about the predictable damage that the trade war can cause in their operations. NEMA brings together some 350 electrical imaging and medical imaging manufacturers, including major brands such as OSRAM, LEDVANCE, Signify, EATON, CREE and Acuity Brands, among others that will seem familiar to you. .

If the tax escalation continues the lighting industry in the United States would be the most affected. NEMA has expressed its concern, so his voice is not a prophet cry in the desert, it will pay attention because today the industry has a difficult road to go.

Some NEMA members manufacture all of their products or some of the components in China. But these same companies, in turn, have manufacturers located in the North American country. Plants on both sides of the Pacific are not independent of each other, but mutually complement each other's production and / or marketing processes.

The reasons for the trade war alleged by the United States are the practices that violate the law. the intellectual property and exclusiveness of the "Made in China 2025" program led by the Asian country, which does not allow US companies to compete on a level playing field. NEMA stresses in its letter that it supports the current administration's interest in finding a solution to the unfair competition of Chinese companies – the association takes care of the ## 147 ################################################################################### 39 to be so direct in its references but the context does the work. However, the letter indicates that some measures could be counterproductive and cause harm to companies in the United States and their workers rather than benefiting them.

The companies that are part of NEMA -says The association remained competitive in the 21st century global market by investing heavily in global supply chains. Companies have redefined their manufacturing and assembly processes in different parts of the world based on the comparative advantages offered by each site. That is, the presence of technology in some places and the tax benefits or cheap labor in others

However, it is argued that the benefits of a global market when trading partners violate agreed international rules and standards. by the international community. The Association specifies that sovereign countries have the right to take measures against unfair competition by limiting the entry of certain products through customs duties. NEMA, however, stresses that restrictions must minimize collateral damage – that is, harm to its members – and have a specific goal that should be achieved and enforced for a limited time. The Association requests that, despite the negative consequences that taxes could have on the US industry, it continues to enforce in order to attract the Chinese government to the negotiating table, when is – we could expect that they start. We do not believe that the US government has a precise answer to this question, the decision to do so being on the side of the Chinese government.

In recent decades, commercial networks have grown in size and complexity; economically, the world is increasingly interdependent. Therefore, it is difficult for a trade sanction not to affect the economies that are related to each other, especially if it is one of the largest economies in the world.

The lighting industry is a clear example. Many of the NEMA companies have competitive relationships with their Chinese counterparts, but many others have trade partners and suppliers in their Asian counterparts in their Asian counterparts.

Chinese manufacturers seem to be indispensable to the industry. American lighting. Some US companies hire Chinese companies to produce products that meet US specifications and standards and then import them under their own brand. Other companies introduce components from the Asian country, but the final product is assembled in the United States.

Some of the components of the fixtures imported from China are not available in any other country or, although in some cases there are other options, making adjustments in the supply chains can be a process long and expensive. Nor do we forget that China is the world's largest producer of rare earths, including gallium, an essential component of LED technology and that the United States has not produced since 1987.

In an interconnected economy, a domino effect is predictable. Negative impacts on businesses could also occur for customers and other industries. Many of the products listed for possible application of higher tariffs are needed in the operations of the manufacturing sector and the construction industry, including the power grid and hospitals – lighting spaces is the most obvious of these.

The lighting industry is outstanding. Recent events show that companies do not only depend on their innovation capacity and their market strategies; Inserted into the globalized world, the lighting industry is linked to politics, to the international economy, to national ambitions, in other words to the complex world in which we live today. # 39; hui.

Final Note: [19659003] Before the imposition of tariffs on steel and aluminum by the United States Government, the Mexican Government also reacted by imposing taxes on some products, including lamps. However, what we mean by "lamp" has not been defined. When we have more information we will make a report.

Sources:

"The EU accuses China before the WTO of intellectual property theft", El Economista 23 March 2018. https: // www .eleconomista. com.mx / empresas / EU-accusa-a-China-before-the-WTO-of-property-intellectual-robbery-20180323-0044.html

Ivette Saldaña, "Mexico responds to the EU by tariffs, announcement of equivalent measures ", El Universal, 31 May 2018. http://www.eluniversal.com.mx/cartera/economia/mexico-responde-eu-por-aranceles-anuncia- medidas- equivalents

Jessica Meyers, "How the plan" Made in China 2025 "became the real threat of a trade war", Los Angeles Times in Spanish 24 April 2018.
http://www.latimes.com/english/internacional/the-e-como-plan-made-in-china-2025-se-convirtio-en-la-verdadera-amenaza-de- una-guerra- commercial-20180424-story.html

NEMA Comments on the Determination and the request for public comment on the draft decision in accordance with Article 301: China Acts, Policies and Practices in the Field of Technology Transfer, Intellectual Property and Innovation, July 23 2018. https://www.nema.org/Policy/Trade/Documents/NEMA%20Comments%20on%20USTR%20Proposed%20Tariffs%20re%20Chin a% 20301% 20July% 202018.pdf