Following the news that the US Government will impose a 25% tariff on certain categories of products imported from the People’s Republic of China, Mike O’Neal, President of Nortech Security & Control, has written and published a letter addressed to the company’s clients explaining that the cost impact of these new tariffs will need to be mitigated and passed down through the supply chain.
Leading on from a previous letter that the company sent out earlier in July, Mr O’Neal says that these tariffs are so significant, that they will necessitate several actions on the part of the company, including price increases on several product categories it supplies to the market.
“These increases cover some of the increased tariff costs we will incur, and our goal is to mitigate the cost increase as much as is possible. However, a 25% increase is extraordinary. In addition to looking for more supply chain efficiencies, steps we are taking include exploring changes in the way we assemble our products. This may include some assembly in the US and moving manufacturing of certain products to other locations. We are also submitting an application to the US Trade Office for certain products to be exempted from the tariffs. However, these actions will take time, and unfortunately, the tariffs are already in place.” says Mike O’Neal in the correspondence.
He goes on to explain that due to the cost impact due to the tariffs, the company will be implementing price increases ranging between 4% and 7.5% on certain product categories for orders received after August 17th, 2018. He says. “These are necessary steps we must take to protect our ability to continue developing compelling new product offerings, and they cover only part of the total impact of the tariffs. Additionally, we are concerned that the US Government may announce additional increases that will affect more product categories, and this will have greater impact on both our business and yours. We are helping petition the US Government to find other means of resolving trade issues and hope additional tariffs do not impact us all.”