Amidst the backdrop of an ever-changing landscape of new tariffs impacting the United States economy over the last few weeks—including a new round that took effect on March 12—The Vision Council (TVC) recently hosted a webinar to discuss the potentially significant implications the optical industry may face as a result.
But before we get to that, here’s a rundown on the timeline of these U.S.-imposed tariffs (otherwise known as taxes on imports).
When did this “trade war” start?
The origins of this so-called “war” can be traced back to 2018 during current U.S. President Donald Trump’s first term in office, in which the country largely targeted China by implementing Section 301 tariffs on most Chinese goods while also imposing a 25% tax on imported steel and 10% on aluminum imports from other trading countries.
Along with these—and still during the president's first term—the U.S. also threatened tariffs against Canada and Mexico to renegotiate a trade agreement (dubbed the “U.S.-Mexico-Canada Agreement” [USMCA]).
- To note: The majority of these imposed tariffs were upheld during former U.S. President Joe Biden’s administration, along with new restrictions and tariff hikes.
And more recently?
Making good on a promise made during his 2024 presidential campaign, Trump signed an executive order on Feb. 1 that imposed tariffs on imports from:
- Canada and Mexico (25% each)
- China (10% on top of the 10% already established in 2018)
While the planned tariffs for Canada and Mexico were later paused, tariffs on Chinese goods took effect on Feb. 4.
On Feb. 10, China slapped tariffs on U.S. products.
Fast forward to March 4, when the U.S.’s 25% tariffs on imports from Canada and Mexico went into effect (with a levy limitation of 10% on Canadian energy). On that same day, the tariff on all Chinese imports was doubled to 20%—again, on top of the existing Section 301 tariffs from 2018.
- In response: All three countries announced plans of their own for retaliatory tariffs (and China actually imposed an up to 15% tariff on certain U.S. farm exports, among other actions.
Then on March 5 and 6: The U.S. paused new tariffs affecting goods from Mexico and Canada for 30 days and also issued a 30-day postponement of 25% tariffs on multiple imports from Mexico as well as some from Canada.
Please tell me that’s the last of these tariff updates.
We can … but we’d be lying if we did. In fact, new developments in the trade war picked up again on Monday (March 10).
- The update: In response to the U.S.’s doubled tariff of 20% from March 4, China imposed an additional 15% tax on certain American agriculture products (think: chicken, pork, beef, and soybeans)
And on March 12: The U.S. imposed a 25% tariff on all steel and aluminum (which was originally 10%) imports.
- The response (as of the time of publishing):
- The European Union (EU) announced retaliatory trade action on a broad range of products from the United States, including industrial and farm products.
- Canada announced plans to issue “billions in retaliatory tariffs,” equating to roughly $20.7 billion U.S. dollars.
So how does the optical industry play into this?
As with other industries, eyewear stands to take a potential hit in stability and profitability.
During a March 6 webinar, Rick Van Arnam, regulatory affairs counsel for TVC, noted that these new tariffs—specifically on Chinese goods—are in addition to the previously existing Section 301 tariffs and regular duties implemented in 2018.
- To note: Those Section 301 tariffs range from 7.5% to 25%, and Van Arnam added that some optical products may be hit with duties anywhere from 50% to 100%.
Go on …
Based on 2023 import data from the U.S. International Trade Commission (USITC)—and analyzed by TVC—further U.S. tariffs slapped on Chinese imports could result in increased costs for frame, sunglasses, and other glasses imports like readers, goggles, and blue light glasses.
- And for Mexico: The tariffs would lead to a major impact on lenses’ import costs.
Why this impact could be so significant: China is currently the largest source of eyeglass frames and mounting (plastic and non-plastic) imports into the United States—and the second-largest source of non-glass spectacle lenses (with Mexico coming in first).
What other Chinese-imported optical products could be impacted?
Taking into account current regulatory customs duty, Section 301 duties, and the updated tariffs the U.S. recently added, Arnam noted that optical products of Chinese origin could face a total duty of anywhere from 27.5% to 33.5%.
Among those products:*
- Non-plastic frames or mountings (total duty: 27.5%)
- Glass lenses (optically worked and unmounted) (total duty: 29.5%)
- Contact lenses (total duty: 29.50%)
- Over-the-counter (OTC) reading glasses (total duty: 29.5%)
- Complete eyeglasses (total duty: 30%)
- Optical telescopes (including monoculars) (total duty: 33.5%)
*This is not a comprehensive list of impacted products.
Any notable callouts on these Chinese-imported products?
Arnam broke down the duty costs for eyeglass cases—which have historically carried high duties—imported to the U.S. from China based on their tariff classification.
- About those classifications: These are determined by the composition of the cases’ outer surface: plastic, leather, textile materials, man-made fibers, laminated plastic sheetings, etc.
The total duties: Ranged from above 50% (for cases made with an outer surface of reinforced or laminated plastic sheeting) to as high as 65% (for cases made with an outer surface of plastic sheeting other than reinforced or laminated plastic sheeting).
What about the impact on equipment used to make eyewear products?
Such production equipment includes (but is not limited to) lens grinding and coating equipment, lens generators, lens finding machines, lens polishers, and lens edgers.
For these: Chinese-imported production equipment already faces a regular customs duty rate (ranging from just 2% to 4%, Arnam commented) as well as those aforementioned 25% Section 301 duties.
- The new impact: This equipment will now also be subject to the additional 20% duties, bringing the total duty amount to around 50%.
Any examples of these?
Three were provided:
- CAD/CAM milling systems (total duty: 49.2%)
- CNC milling systems (total duty: 49.2%)
- 3D printers: (total duty: 47.5%)
And what if optical products are coming from Canada or Mexico?
The outlook isn’t looking great for those duties either (although the percentage of tariffs isn’t as high as those for China).
- Why: Reciprocal tariffs of 25% are set to take effect on April 1 for optical products imported from Canada, Mexico, and other countries
And in addition to that 25% tariff, the regular customs duty is set at 2% or 2.5% (save for select product types).
- However: Certain products may qualify under the previously-established Free Trade Agreement (via the 2020 USMCA), in which case the regular customs duty is free.
I need an example of how this could look.
For optical products coming from Canada or Mexico, the following would apply:
- Contact lenses (total duty: 27% or 25% if USMCA eligible)
- Glass lenses (total duty: 27% or 25% if USMCA eligible)
- Plastic frames or mountings (total duty: 27.5% or 25% if USMCA eligible)
- OTC reading glasses (total duty: 27% or 25% if USMCA eligible)
- Goggles (total duty: 27.5% or 25% if USMCA eligible)
- Optical telescopes (total duty: 31% or 25% if USMCA eligible)
- Customs duty for such products is 6% (unless USMCA eligible)
Got it. So what should optical industry members keep in mind?
Arnam emphasized that members can prepare for these new (and impending) tariffs by staying aware—and understanding—country-of-origin regulations and issues that will (and already do) impact importers.
- “If you find yourself in a situation where you're unclear or unsure of what the actual origin of the product is, then it would greatly benefit you to drill down and to determine whether or not there's been a substantial transformation,” he added.
And as TCV stated: “Companies (may) need to explore alternative sourcing strategies and evaluate cost-saving measures to remain competitive in this evolving trade environment.”
So what are the next steps in this trade war for the optical industry?
The Vision Council noted that it is actively engaging with policymakers and trade officials on behalf of the industry to help "mitigate negative impacts” and advocate for tariff relief.
Omar Elkhatib, the Council’s senior manager of Government Relations, added that they are also working with “relevant committees of jurisdiction” impacting the U.S. Trade Representative, and “we are building relationships with members of Congress who can champion our causes.”
And in the meantime?
To stay up-to-date on the latest tariff developments, TVC members can access a new Tariff Dashboard to view an aggregation of import data (and a tariff simulator) from the U.S. International Trade Commission.