What’s New

While I am still not clear about the impact these new tariffs and negotiating will ultimately lead to, I am certain that we all need to be ready with our own “strategic uncertainty” planning.

HARMAN, like many of you, have been creating multiple plans to deal with the escalating trade war with China. We believe that we are in a better place than most suppliers because of our global sourcing footprint. During the first Trump presidency, HARMAN worked with many of our suppliers to move the manufacturing of our top selling products to another country other than China. This has put us in a better position for this next round of uncertainty.

 Anticipating tariff increases, the company received more goods at the end of CY24. This inventory, without the increased tariffs, will help us and our customers over the next couple of months as consumers start buying up products that were imported prior to the announcement of the new tariffs on April 2^nd.

Depending on what source you choose for your news and the impact tariffs will have on our products, rest assured that HARMAN is collaborating closely with our suppliers and the current administration in Washington DC to mitigate the challenges that we are all facing. According to NPR, (National Public Radio) consumers are buying up certain products, including consumer electronics because of the uncertainty of tariffs. NPR stated that retail sales saw a big jump in March driven by big-ticket items.

With a 90-day pause on tariffs for most countries in affect now, HARMAN will continue to evaluate our supply chain to determine if we can shift production to more favorable tariff countries. Moving production to another country takes time and capital. We are evaluating the multiple scenarios associated with such moves. In some cases, it may make sense to make that move and in others perhaps not.

A recent statement from Gary Shapiro, CEO and Vice Chairperson of the Consumer Technology Association shared that the pause in tariffs is temporary. “The tech exclusion is not a permanent solution. Unpredictability is undermining long-term investment and growth. More, high production costs and a limited skilled workforce make domestic manufacturing of consumer tech challenging. To support U.S. innovation and competitiveness, we need a smarter, targeted trade strategy where we team up with allies to compete with China” Here is a link to the statement from Gary Shapiro. https://www.cta.tech/press-releases/cta-ceo-tech-exclusion-not-a-permanent-solution

How can you benefit from the uncertainty of consumer sentiment? If I were you, I would encourage your customers to make their big-ticket purchases now and if you have the space and capital, I would also encourage you to purchase certain products, that are now in our warehouses, to mitigate any possibility of price increases that might occur due to the proposed tariffs.

HARMAN is a great partner that you can rely on in uncertain times. We have proven over the past several years, that we can withstand headwinds. From the shortages of semiconductors due to the fire at the AKM factory in Japan, or mitigating the tariff increases during the first Trump presidency, we have the experience and the confidence that we can do the same now.

If you have further questions or concerns, reach out to any of our sales team members. They will help you navigate through the maze of uncertainty.