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Lab product prices hit by China tariffs

In some cases firms have shifted production from the country to blunt the impact on customers and profits

by Marc S. Reisch
January 7, 2019

Phot of a researcher taking inventory of lab stock.
Credit: Shutterstock
Tariffs are contributing to increased prices for some lab supplies from China.

Major suppliers of laboratory equipment and consumables are increasing prices or shifting production away from China in response to the ongoing trade dispute between the US and China.

Cole-Parmer is the latest research supplies house to increase prices because of tariffs China has imposed during the trade stand-off. The firm sent a letter to US customers at the end of 2018 telling them to expect price increases effective Jan. 3.

Until now, a spokesperson points out, the firm hasn’t increased prices and mostly satisfied customers with stock obtained prior to US imposition of a 10% tariff on Chinese goods in September. China followed with similar tariffs on US goods.

But now that Cole-Parmer is restocking at higher prices because of the tariffs, it will include a temporary charge on invoices to recover tariff costs, the spokesperson says. “We’re not increasing prices, but we are adding a line item” to recuperate most of the import charges, the spokesperson explains. The company says it will eliminate the surcharge after the trade dispute shakes out.

While the US and China are in talks to settle the dispute, further increases may come as soon as March if the two sides do not come to an agreement. US President Donald Trump has threatened 25% tariffs on a host of Chinese goods.

Cole-Parmer seems to be limiting the surcharge to Chinese-made goods. Omar Abdelrahman, an assistant professor of chemical engineering at the University of Massachusetts, Amherst, says an analytical balance from China he placed in his cart on Cole-Parmer’s website had a 2.9% surcharge. Another item, a syringe pump from elsewhere, did not have one.

Abdelrahman, who tweeted about the Cole-Parmer tariffs, says neither he nor his colleagues have felt any other “tangible effect of the trade policy.”

But some lab supply firms have already taken action that might not be immediately apparent to customers. Anticipating the tariffs, Agilent Technologies relocated production of some goods from China to Wilmington, Delaware, CEO Mike McMullen told analysts in August 2018. If tariffs remain in place in 2019, the company plans to make other supply chain adjustments and to increase prices to protect profit margins, McMullen said.

In an October call with analysts, Thermo Fisher Scientific CEO Marc N. Casper said his company is making supply chain adjustments and increasing prices “in certain places.” Thermo Fisher’s sales of US goods to China will also be impacted, though Casper noted that laboratory instruments and supplies were not the focus of China’s tariffs, thus muting the impact on the firm.

The instrument maker Bruker told analysts in a November call that US-made Bruker products going to China are now subject to Chinese tariffs and that the firm is pursuing “supply chain and other measures” to reduce the impact. Interim chief financial officer Gerald Herman estimated the tariffs will likely reduce the firm’s revenues by less than 3%.

Laboratory products supplier MilliporeSigma says tariffs have impacted some products imported from China, and that future tariff increases seem likely. But the firm vows to insure “minimal cost impact” on its customers.



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