Sonos Gets Longer Temporary Exclusion of List 4A Tariffs, Through 2020

The Office of the U.S. Trade Representative notified Sonos it got extension through Dec. 31 of the exclusion from the List 4A Section 301 tariffs on speaker imports from China, said the company in a Thursday SEC filing. The exclusion extension eliminates the 7.5% tariffs until year-end. Sonos sources the speakers under the Harmonized Tariff Schedule's 8517.62.0090 subheading for a wide swath of Bluetooth goods, one of 87 categories granted USTR extensions Aug. 31 (see 2008310033). Sonos, whose exclusion was granted in March (see 2005110034), has begun the process of seeking refunds for the $30 million in tariffs paid through July, said Chief Financial Officer Brittany last month (see 2008060030). The company is continuing plans to diversify its supply chain into Malaysia, Bagley said on the August call. Sonos turned to Malaysia to reduce exposure to the tariffs on Chinese-sourced wireless mesh networking audio components. The company planned to have “significant” U.S.-bound production from Malaysia ramped up by Dec. 31, but due to COVID-19-related government restrictions on manufacturing in Malaysia, reaching scale will take until mid-2021, Bagley said.