(June 28) Tariffs imposed by Trump threaten to drive the last remaining television assembly plant in the US out of business. Element Electronics based in South Carolina assembles TVs for Walmart with components from China.
New Trump proposal would put 25 per cent tax on Chinese goods
The Element plant opened in 2012. It supplies most of its TV's for Walmart's Made in America Initiative. However, the parts are made in China and tested and packaged in the US. The company also inserts memory boards into the TVs. The company notes on its packaging that the TVs are assembled in the USA. The Alliance for American Manufacturing that lobbies for domestic production has criticized the process as the TV itself is not made in the US.
A recent article describes the plant: "Element Electronics opened the plant in an old shirt factory in Winnsboro, South Carolina, in 2014, chiefly to supply televisions to Walmart for the retailer’s highly publicized buy-American campaign. It employs 250 workers."
The Element plant was scheduled to close last summer
The plant was ready to shut down last summer after Trump's initial tax proposal. At the time the 250 factory employees were told they were being laid off but then the Trump administration exempted TV parts from the tax eligible list, so the plant continued production.
The decline of TV manufacturing in the US
Reuters reports that the US had 150 TV manufacturers back in the the 1950s. Today most television sets come from Asia although 40 percent are imported from Mexico. If Trump decides to impose a tariff on Mexican goods this could help out Element.
A recent Reuters article notes: "Those sets had hundreds of parts and were often sold in wooden cases the size of kitchen stoves. A modern flat screen, by contrast, has 70% of its value packed into the glass panel, and production is now almost entirely in Asia."
Discussion with China expected at this weekend's G20 summit
China and the US are expected to have discussions on a trade deal this weekend at the G20 Summit. Meanwhile, Element is stockpiling parts from China to act as a buffer against the unknown. The remaining Element plant is mostly symbolic as it does not manufacture TV parts. If it is forced to close this will be mostly symbolic as well as it will have a minimal effect on the overall US economy. However, for the 250 employees who lose their jobs it will be far from symbolic.
Previously published in the DIgital Journal
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