This Week in Imaging: The U.S.-China Trade War and the Office-Imaging Industry

by Kathleen Wirth · Published May 17, 2019 · Updated May 17, 2019

The big news has been the escalating trade war between the United States and China, with last week U.S. President Trump raising a 10 percent tariff on $200 billion worth of Chinese goods to 25 percent. On May 13th, China retaliated by imposing a 25 percent tariff on $60 billion worth of U.S. goods.

On May 10th, the U.S. Trade Representative also issued a statement stating that it was in the process of raising tariffs on virtually all remaining Chinese goods, which are valued at approximately $300 billion (referred to as List 4, which includes copier/MFPs, and standalone printers, fax machines, and copiers, and their parts and accessories; interestingly, standalone document scanners are not mentioned). That would essentially mean that all China-made office-imaging equipment, parts, and supplies imported into the United States would be subject to tariffs. According to the Nikkei-Asian Review, China accounts for 52 percent of the value of U.S. imports of MFPs, U.S. trade statistics show

Exemptions are possible, and to date, Fujifilm has received an exemption on its offset-printing plates, while Kodak has also received exemptions for its printing plates. Ricoh, for its part, announced this week that it will move some of its printer and MFP production out of China and into Thailand in order to evade U.S. tariffs. Ricoh’s Chinese factories continuing to produce printers and MFPs, but mainly only for Europe and Asia.

The industry as a whole, including HP Inc. and Dell, as well the general tech industry, has of course opposed the tariffs. Back in December 2018, CompTIA, which represents the global technology industry, warned of the effects on U.S. businesses and consumers, stating: “Thus far, the current trade war has only hurt American consumers and companies. Products are more expensive for consumers and companies have seen their profits thinned.”

While some businesses have shrugged off 10 percent tariffs, 25-percent tariffs will likely be much more painful, especially for office-imaging companies, which for the most part, already have slower copier/printer revenues, with Xerox, for instance, reporting a 9.4 percent year-over-year revenue decline for its last quarter, and Canon Inc. reporting a 10-percent year-over-year net sales decline, with sales for its Office Business unit down 3.9 percent year-over-year. Companies must either absorb the cost of the tariffs themselves, or pass them on to customers, with the tariffs being paid to the U.S. government.

President Trump is expected to make a decision regarding the 25-percent tariff on an additional $300 billion of Chinese goods as early as late June. A decision to enact the further tariffs could prove extremely damaging, according to many analysts. “A further 25 percent U.S. tariff on $300 [billion] worth of goods would make global trade burn in a way that only ‘Game of Thrones’ watchers could understand,” Freya Beamish, chief Asia economist with Pantheon Macroeconomics, said in a report, according to CBSNews.

This Week in Imaging:

Ricoh Shifting Production to Thailand in Response to U.S.-China Trade War

Improved Results for Toshiba’s Fiscal Year

Declining Sales, Profits for Toshiba TEC’s Fiscal Year

Konica Minolta Reports Profitable Fiscal Year

New Lexmark Cloud Print Infrastructure as a Service

Xerox Previews Latest 3D-Printing Technologies

Océ Colorado 1650 is Canon’s Latest UVgel Printer for Graphic Arts

Brother MFPs Now Feature Compatibility with YSoft Print-Management

Xerox Appoints New U.S. Dealer Partner Leader

Mopria Survey Indicates Paper Still Important in Office Workflows

IDC Reports Lower Printer and Copier/MFP Shipments in Western Europe