US Suppliers Shifting Some Purchases to GSP, Mexico for Christmas Lights

Christmas lights producers outside China appear to have doubled their volume of exports to the U.S. after the Section 301 tariffs more than doubled the tariffs on Chinese lights, according to the Coalition for GSP. The group decided to look at Christmas lights because nearly all of the imports happen from August through October, so the impact of the tariff jump on Chinese lights from 8 percent to 18 percent on Sept. 24 would show up immediately.

During the months of September and October, the volume of lights imported from Indonesia, the Philippines and Cambodia -- all Generalized System of Preferences program participants -- reached $46 million, compared with $23 million in September and October 2017. The volume also jumped from Mexico, which exported $2.8 million worth of Christmas lights to the U.S. in October, compared with $1.1 million in the same month in 2017. Volumes from China fell $32 million in those two months compared with the year-earlier period. Imports from Mexico and the GSP countries are tariff-free.

The Coalition, led by Dan Anthony, had already done an analysis of October imports more broadly from GSP countries (see 1812100007). When looking at the whole Christmas lights import season, imports from China were down about 5 percent, as importers shifted earlier in the year to beat the tariffs. August imports from China were higher than in 2017. There are more than four times as many lights imported from China as from Cambodia, Indonesia and the Philippines combined.