Chinese tariffs could impact future firework sales

While thousands of fireworks already have been shipped from China for Fourth of July celebrations, the industry is bracing for tariffs on Chinese goods that could drive up prices and darken skies for future summer celebrations.

The 25% tariffs, which the Trump administration proposed in May, would hit a U.S. firework industry that relies heavily on Chinese imports — 99% of consumer fireworks and 75% of professional fireworks are imported from China, said Julie Heckman, executive director of the Maryland-based American Pyrotechnics Association.

“Fireworks cannot be purchased anywhere else in the world but China,” said Bruce Zoldan, CEO of Phantom Fireworks, referencing a statement made by President Trump encouraging companies that would be impacted by tariffs to move production out of China or into the United States or a country like Vietnam, The New York Times reported.

“It would take other countries years, if not decades, to come up with the formula and ability to manufacture fireworks, what China has done for over 1,000 years,” Zoldan said.

Zoldan expressed those manufacturing concerns to White House officials in early May. Trump could make a final decision on tariffs by the end of the month, The Washington Post reported.

“I think the president certainly has a substantial reason why he wants to negotiate with China, and there are things he’d like to bring into a more level playing field, but I think there’s some product lines that don’t belong in the tariffs,” Zoldan said.

Heckman is preparing to testify the week of June 17 during the Office of U.S. Trade Representative’s public hearing, followed by at least one week for comments.

Despite these efforts, the industry has its eyes on the June 28-29 G20 summit in Osaka, Japan. Trump said he wants to meet there with China’s President Xi Jinping to make a decision on whether to extend tariffs, according to The New York Times. A meeting between the two has not yet been confirmed.

“We’re optimistic that President Trump and President Xi might come to some final negations during the G20 summit later this month and that the tariffs could all go away, but it’s too risky for us to ride on those hopes, which is why we’re testifying, why we’ve submitted comments, why we’ve initiated grassroots efforts,” Heckman said.

Industry uncertainty

But both presidents have been going back and forth since May, when Trump imposed tariffs on $200 billion in Chinese goods. China retaliated with tariffs of its own, causing Trump to threaten a new round, which would hit another $300 billion in Chinese goods, including fireworks.

“The industry has been preparing for the tariffs since last year’s because we just didn’t know, would fireworks be on list two?” Heckman said.

The uncertainty of the tariffs along with issues with Chinese factories, obtaining shipping containers and finding open ports have plagued the industry for years, Heckman said.

But knowing the tariffs could hit in July, if implemented, has some companies trying to get ahead.

“We did see a significant increase in product that came in in the first quarter 2019, just trying to get ahead of the tariffs,” Heckman said. “Companies who have the financial means, they have started importing earlier and earlier, year after year.”

For Zoldan, who said the proposed tariffs would start impacting sales as early as New Year’s Eve, said Phantom Fireworks typically starts getting in new shipments for New Year’s and the next year’s Fourth of July starting in August or September — after the tariffs would go into effect.

“It means that there’ll be less money or less merchandise available because people have budgets to work with,” Zoldan said. “They have so many dollars they allocate to their Fourth of July picnics.”

At the municipal level, firework displays can cost between $7,500 and $15,000, Heckman said, adding, “We’re more concerned about the small townships and municipalities that struggle year after year in raising money to have their small town community display,” compared to bigger displays that are usually funded with a corporate sponsorship.

And while roadside tents for large companies most likely won’t be impacted, residents could see fewer tents at churches, schools and organizations that sell fireworks as fundraisers, she said.

Officials with Warrendale-based Zambelli Fireworks, which puts on large displays, declined to comment.

Despite the ripples tariffs could send through the firework industry, China — as the main producer of fireworks — will likely feel nothing, Heckman and Zoldan agreed.

“Americans love the Fourth of July,” Zoldan said. “And it’s important that their families have celebrations, and I don’t think Americans want their celebration of America’s birthday to be messed with.”