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How is the China trade war impacting digital signage?
The ongoing trade war between the U.S. and China is also impacting the digital signage industry.
September 26, 2019 by Bradley Cooper — Editor, ATM Marketplace & Food Truck Operator
The trade war with China is still ongoing, with no signs of resolution. On Sept. 1, President Trump imposed a 15% tariff on finished consumer goods from China, with another 15% tariff going into effect on Dec. 15. The Chinese government has hit back with tariffs as well, and has refused to buy certain American goods, such as agricultural goods, according to a report by Yahoo Finance.
Some economists expect the trade war to get much worse before it gets better, with China possibly boosting tariffs on U.S. goods by as much as 20%. This ongoing showdown between the U.S. and China is also impacting the digital signage space. As a result, many manufactures have had to up their prices.
"Most, but not all, U.S.-based commercial display companies that have their product manufactured in China have raised their prices by as much as 10%," Chuck Lewis, VP of Palmer Digital Group, said in an interview with Digital Signage Today's sister site Kiosk Marketplace. "If the tariffs on goods we purchase stay the same or go higher for the foreseeable future, we definitely believe it will have an adverse effect on the industry and economy as a whole."
Manufactures of other pieces of digital signage hardware, such as media players are also being hit by the trade war.
"Like most other companies that either source or manufacture in China, the new tariffs are increasing our production costs and, by extension, increasing costs to our resellers and other customers," Jeff Hastings, CEO of media player manufacturer BrightSign, said in an email with Digital Signage Today.
These tariffs are also affecting the supply chains of both display and kiosk manufacturers, according to Marcos Fuglin, business development director at kiosk manufacturer Apek International.
"According to the International Monetary Fund, in the first quarter of 2019, the trade tensions helped pull a sharp slowdown in some market segments as the global technology supply chains were threatened by the possibility of the United States imposing sanctions," Fugulin said in a report on Kiosk Marketplace. "This is extremely damaging the market for digital kiosk and correlated markets, and as there is no such ecosystem in the U.S. to guarantee national production of these products, it must be created (or recreated) to keep the business running and will take a long time, longer than the market can afford."
As a result of all this, Hastings believes that end users may have to pay higher costs for their digital signage equipment as the tariffs continue to lead to fluctuating prices.
"Consumers should be prepared for price fluctuations as manufacturers adjust to what is a very dynamic global trade marketplace," Hastings said. "Companies are diligently reworking their supply chains to deliver the best value for their customers, but changes of this magnitude take time."
That being said, Hastings is still confident that this current situation is temporary and will resolve itself…eventually.
"Digital signage hardware manufacturers across the board are facing the same set of challenges, so I’m confident we’ll maintain our competitive advantage as the market adjusts to these new tariffs," Hastings said. "We’re currently ramping up manufacturing in two other parts of Asia unaffected by the tariffs. In a short time, we expect our pricing to return to what it was prior to the tariffs taking effect."
About Bradley Cooper
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BrightSign
BrightSign is the global market leader in digital signage media players, offering the most reliable, secure and sophisticated solid-state media players on the market today.
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