Surge Suppressors
Sourcing Guide & Market Intelligence

Tariffs to negatively impact the electrical systems and lighting components sector

• The Trump Administration’s reciprocal tariffs, which apply general tariff rate increases to most leading US trade partners, are set to take effect on August 7, after the administration finalized the rates on August 1. These changes will significantly increase the tariff rate on leading electrical system and lighting component exporting countries, including China (54.0%), Mexico (25.0%), Vietnam (20.0%), and Taiwan (20.0%).
• The United States also raised tariffs on aluminum and steel, common inputs in electrical systems and components, to 50.0% in July, adding to rising costs in this sector.
• Lighting companies, such as Signify, commonly operate factories in Mexico and import components from China, indicating that higher tariffs will increase operating costs for suppliers with domestic manufacturing operations, in addition to increasing the cost of imported finished products.
• As many electrical systems and components, such as electrical transformers and switchgear systems, are already facing shortages and price increases, higher tariffs are likely to drive up prices further. For example, electrical transformer prices have already risen 70.0% to 100.0% since 2020, and higher tariffs are expected to push up prices further as Mexico, Canada, and China supply 80.0% of the transformers used in the United States.
• Likewise, the United States is reliant on imports for many major lighting components. For example, according to the Department of Energy, 94.0% of all LED imports to the United States were manufactured in China.

United States announces new tariffs on all imported steel

• In February 2025, the United States announced 25.0% tariffs on all imported steel with no exemptions or exceptions. The tariffs took effect on March 12, 2025. On June 4th, these tariffs were increased further to 50%. These tariffs were not impacted by a recent court decision that temporarily suspended duties on certain goods as they were implemented under Section 232 of the Trade Expansion Act.
• Previously, countries such as Canada, Mexico, and Brazil, the top exporters of steel to the United States, had exemptions from tariffs. These have now been removed and all imported steel, regardless of origin, will be subject to the 50.0% tariff. However, on May 8th, the US announced an agreement with the United Kingdom to remove all levies on steel exported from the UK.
• When tariffs on steel imports were introduced in March 2018, they contributed to an increase in the price of steel and steel products. According to the Bureau of Labor Statistics, the price of steel-milled products increased by 10.2% in the year after the tariffs were implemented. This market heavily relies on steel as an input and may be impacted by this policy.

China bans exports of rare minerals to the United States

• On December 4, China announced a ban on all exports of gallium, germanium, graphite, and antimony to the United States, escalating existing trade restrictions on these materials.
• China is the leading global producer of each of these metals, producing 98.3%, 67.9%, 62.0%, and 48.2%, respectively, of the world’s gallium, germanium, graphite, and antimony supplies, respectively.
• The United States can still access these resources from other trade partners who make up most of the remaining global supply of the impacted commodities, such as Canada, Japan, and Brazil.
• However, the loss of supply from China, the leading producer of these materials, will increase prices and supply chain risk in a range of markets that rely on the affected metals, such as the semiconductor, batteries, and solar cell markets.
• China’s export ban on these materials is in retaliation to expanded US export bans on advanced semiconductor manufacturing equipment and technologies to China announced two days prior. This ongoing trade dispute adds further uncertainty to technology markets, which are often reliant on components and materials exported from China.