Tariffs on Bluetooth Headphones, Earbuds Would Force Layoffs at JLab Audio, Says CEO

JLab Audio, which markets Bluetooth earbuds, headphones and speakers through Best Buy, Target and other big-box retailers, wants to testify at the Trump administration's Aug. 20-23 public hearings against proposed 10 percent Trade Act Section 301 tariffs on Chinese imports, said CEO Win Cramer in July 27 comments posted Tuesday in docket USTR-2018-0026. JLab in the past five years became “a disruptive force within the consumer electronics category growing itself to a top 5 audio brand despite the competition of much larger, seasoned brands such as Apple, Sony, Bose, and Samsung,” said Cramer. The goods that JLab imports from China under the Harmonized Tariff Schedule 8517.62.00 subheading account for more than 80 percent of the company’s business, he said. Since JLab is “focused on a relatively narrow range of products” under HTS 8517.62.00, mainly Bluetooth earbuds and headphones, it can’t absorb the “added costs” of 10 percent tariffs “by balancing continued profits from other products,” he said. JLab also sells “almost exclusively” to the U.S. market, “so we are unable to offset increased costs in this market with profits from other global markets,” he said. “Because of this, it is our opinion that this increase in duty rate will hurt our small U.S. business, and likely other small and medium businesses, more than it will harm large multinational corporations.” Cramer fears the tariffs would “require our company to engage in cost cutting by laying off U.S. employees,” he said. The HTS 8517.62.00 code to which Cramer referred is the same “single line item” that exposes to tariffs “basically the entire ecosystem of the internet,” said Sage Chandler, CTA vice president-international trade (see 1807300002).