March 4, 2025
Tariffs Hit: Lighting Industry Fallout Begins
New trade duties disrupt manufacturers, distributors and projects overnight
The tariffs weren’t just a threat this time — they're real. As of midnight, the Trump administration’s latest wave of duties slammed into the North American lighting industry like a 30-amp inrush current. The numbers alone are daunting, but the real story is about the scramble happening inside boardrooms, factories, and electrical distributors across the U.S., Canada, and Mexico.
For companies that spent the last decade optimizing supply chains to work around past trade disputes, the game has changed overnight.
Breaking Down the Tariffs
- Canada & Mexico: A 25% tariff now applies to nearly all imports from these two key U.S. trading partners.
- China: The existing 10% tariff on Chinese imports doubled to 20%, driving up costs on lamps, finished goods and critical lighting components. The latest 20% in China tariffs is on top of the March 2018 tariffs implemented during Trump's first administration.
- Retaliation from Canada & China:
- Canada: Imposed 25% tariffs on $30 billion worth of U.S. goods, including lighting products under HS codes 9405.11.00, 9405.19.00, and others — making U.S. lighting exports instantly less competitive.
- China: Hiked tariffs 10-15% on key U.S. agricultural exports and banned certain American biotech firms.
- Mexico is expected to announce retaliatory measures later today.
What is the impact?
Some manufacturers will feel this more than others. Acuity Brands, Signify, and Current — each having long capitalized on Mexico’s lower labor costs near the U.S. — are now facing a brutal reversal of fortune. That said, each also operates multiple factories in the U.S., which could help mitigate some of the impact through domestic production.
Take Acuity. More than half of the company's 2024 revenue comes from its seven factories in Mexico. While details remain unclear, an additional 10-15% of finished goods may also be sourced from China. Much of the cost advantage of sourcing from Mexico and China have effectively vanished overnight.
Signify, which operates Cooper Lighting and Genlyte Solutions, also finds itself in a bind, with operations in Juárez, Mexicali, Camargo, and Tijuana suddenly subject to a 25% penalty. And in recent years, the company has invested more heavily in Chinese manufacturing, The maquiladora model, which allowed lighting brands to import Chinese components, assemble them in Mexico, and ship them tariff-free to the U.S., has officially been disrupted.
For U.S.-based brands relying on imported components — LED chips, drivers, housings — the pain doesn’t stop at the border. As suppliers pass along costs, even "Made in America" manufacturers will feel the squeeze. And it won’t end there — steel and aluminum tariffs set to hit next week could further erode the benefits of domestic production.
Stock-and-Flow Brands at a Crossroads
Another group under pressure? Private-label lighting brands that import finished lighting goods from China. These companies thrive on a high-volume, low-margin model, bringing in container loads of made-to-order fixtures that fill U.S. warehouses before being shipped to cost-driven electrical distributors.
While some may swap drivers, adjust optics, or add branding stateside, the core of their business depends on affordable Chinese imports. Now, a 20% tariff on Chinese goods forces a decision:
- Raise prices and risk losing shelf space at distributors.
- Eat some or most of the cost, cutting already thin margins.
- Find a new supplier in Vietnam, India, or Taiwan — a process that won’t happen overnight.
The reality? There’s no easy way out.
What Happens Next?
Lighting companies are scrambling for a Plan B. Some will try to ride out the storm with existing inventory, others will accelerate supply chain shifts to Vietnam or India, and a few may absorb costs in the short term. But for most, price hikes are coming.
- Distributors and contractors should expect gradual price increases.
- Manufacturers may attempt restructuring, but few will fully shield customers.
- If Mexico and Canada escalate retaliation, expect more trade disruptions.
With retaliatory tariffs in play and Mexico expected to announce its response later today, the lighting industry is bracing for further uncertainty. The one certainty? The cost of doing business in lighting just skyrocketed.
