Tariffs Sent December Chinese TV Imports Plunging to Nearly 5-Year Monthly Low

Import statistics culled from DataWeb for the fourth full month in which the 15 percent List 4A Section 301 tariffs were active on Chinese goods showed the December exodus from Chinese TV sourcing accelerating at an even faster pace than in November. With it came signs the TV supply chain diversified into third countries other than Mexico, especially for the cheapest entry-level sets.

December TV imports to the U.S. from all countries declined 34.2 percent sequentially from November and 49.2 percent from December 2018, said DataWeb. China was 22.4 percent of TV imports for the month, down five points from November and nearly 40 points lower than in December 2018 when it was more than six in every 10 TVs shipped here. Chinese TV imports plunged 81.7 percent in December from a year earlier.

The bulk of the TV production that tariffs chased from China moved to Mexico (see 2001100002), but Mexican shipments themselves declined in December amid inroads from other sourcing countries, said DataWeb. U.S. importers sourced 1.63 million Mexican sets during the month, 11.1 percent more than in December 2018, but 35.9 percent fewer sequentially than in November.

Mexico had 67.7 percent of TV imports to the U.S. during the month, a stunning 36.8-point share increase from December 2018, but down 1.8 points from November, said DataWeb. The decline was traceable to a 104 percent one-month surge in December TV shipments from Taiwan, Thailand and Vietnam.

Importers sourced 233,700 TV sets collectively from those three countries in December, said DataWeb. They were 9.7 percent of December's TV imports to the U.S. from all countries, and were heavily skewed to low-end product. The average set shipped in December from Taiwan, Thailand and Vietnam combined was worth $147.97 in customs value, well below the $372.40 average of a set from Mexico, and lower than the $156.39 for the average Chinese set.

The U.S. imported 39.83 million TVs from all countries in 2019, a 9.4 percent unit decline from 2018, said DataWeb. Dollar imports declined 4.9 percent to $12.21 billion. The sets were worth $306.56 in average customs value, a 4.9 percent increase from a year earlier. Q4 unit shipments from all countries were down 38.5 percent from a year earlier to 10.77 million sets. Q4 dollar imports fell 29.7 percent to $3.42 billion. The imported sets were worth an average of $317.50, 14.4 percent higher than in Q4 2018.

China shipped 2.84 million TVs to the U.S. in Q4, 72.5 percent fewer than in 2018, said DataWeb. Its 26.4 percent share of Q4 TV imports was 32.6 points lower than a year earlier. Mexico’s Q4 volume increased 18 percent to 7.37 million TVs for a 68.4 share of U.S. imports, 32.8 points higher than in 2018. Mexico's share gain was roughly equivalent with the pace of China's decline.

U.S. vendors spoke repeatedly during 2019 of retail sales trending toward bigger screens, and DataWeb numbers for the year bear that out. Unit imports of TVs classified under the 8528.72.64.60 tariff code for the largest screen sizes increased 6.7 percent for the year to 23.95 million sets, or 60.1 percent of all 2019 TV imports. That was nine points higher than the comparable 2018 share.

The 2019 increase in shipments of larger sets came when overall TV imports to the U.S. declined 9.4 percent for the year, said DataWeb. But with the larger-screen segment's increased share came additional commoditization. The average 8528.72.64.60 TV import was worth $413.52 in customs value in 2019, 4.6 percent lower than a year earlier.

The drive toward bigger TV-screen imports was no end-of-year phenomenon, said DataWeb. Imports of 8528.72.64.60 goods declined 21.6 percent in Q4, the year’s only quarter to experience a decrease. Shipments of 8528.72.64.60 TVs increased 25.8 percent in 2019's first three quarters to 16.88 million sets, including a 58.2 percent rise in Q1 to 4.78 million units.