During his campaign last year, U.S. President Donald Trump stated several times that he would impose tariffs on products made in China and imported into the United States. Trump stated those tariffs could range from anywhere from 10 to 45 percent.
What would such tariffs mean for the printer and copier/MFP industry? As far as we know, virtually no office printer or copier/MFP today is made in the United States (see below for a caveat on Xerox, however), although many consumables, such as toner, are. Instead, most are made today in Southeast Asia, particularly in China.
While some analysts think it unlikely that Trump would impose such tariffs, others don’t. For instance, the National Law Review states how Trump could impose tariffs using pre-existing laws, noting that President Richard Nixon invoked one such law, the 1917 Trading with the Enemy Act, in the 1970s to impose a 10-percent tariff on steel imports. In 2002, President George W. Bush also imposed tariffs on steel imports, this time under the Trade Act of 1974.
What kind of effect would these tariffs have on office printer and copier sales in the United States? One would hardly think it could help, and indeed could be a substantial blow to Japanese printer and copier vendors who manufacture most of their products in China. It’s also unlikely that China wouldn’t retaliate in some way either.
The “good” news is that virtually every OEM would be affected – prices would rise across the board for everyone. The bad news would be that, depending on how steep the tariffs are, some who were on the fence about upgrading to a new printer or MFP might delay their purchasing.
Overall, even though the service and supply revenue would continue to flow, it doesn’t in any way help the office-imaging industry, as sales would likely decline, affecting both the retail and dealer sales channels. A Xerox or HP might decide somehow to bring more manufacturing back to the United States, but it seems it would take quite some time, money, and effort to get such new manufacturing sites up-and-running. They’d also have to wonder if it would be worth the time and cost in the long run, as such tariffs could be repealed in four years.
A caveat to this is that Xerox might have an interesting advantage in some respects, however. As its Web site states, its largest manufacturing site is in Webster, New York, where it produces fusers, photoreceptors, and, for the production-printing market, Xerox iGen and Nuvera production printers, as well as components, consumables, and other products. It also has a toner plant in Webster. Its solid-ink printers are produced in Wilsonville, Oregon. All of these products would be exempt from tariffs, and thus might benefit. (If we’ve left any U.S.-manufactured products off the list of U.S.-manufactured imaging equipment, we apologize in advance. Our goal here isn’t to identify such products, but to examine the impact of potential tariffs.)
Last, but not least, Trump has also threatened to impose tariffs on products made in Mexico, where at least one major vendor manufacturers toner cartridges.
Speaking of the retail channel, it’s quite a shock to ponder the magnitude of the news that Staples is closing 70 of their office-supply superstores in North America. However, if you stop and think about it, offices are printing, mailing, and filing less, and that means declining demand for paper, ink, toner, envelopes, folders, filing cabinets, paper clips, sealing tape, labels, staplers, staples, etc. – you get the drift – or, in other words, declining demand for the staples of Staples.
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