FORT WASHINGTON, Pa. — Ryan Kiscaden, executive director, Thermostat Recycling Corp. (TRC), released the following statement regarding President Donald Trump’s announcement on $50 billion worth of Chinese tariffs, which include Automatic Thermostats (90321000) at 25 percent.

“The administration’s action will hurt the speed at which mercury-containing thermostats become waste,” he said. “The recycling of mercury-containing thermostats is directly tied to new thermostat sales. As the new unit is installed, it replaces that which was on the wall. Often times, old thermostats stay in service until the entire HVAC system is replaced or consumers wish to upgrade their thermostat. Unfortunately, these proposed tariffs will lead to higher consumer prices for thermostats and threatens the hockey stick growth of the smart thermostat segment for new thermostats.

“There are unintended consequences for the collection program when thermostat replacement demand is curtailed,” continued Kiscaden. “In some states, TRC has state-required numerical collection targets. When an externality, such as higher prices for finished goods are introduced, it has a double whammy effect for thermostat manufacturers. They will not be able to sell new units at the same pace because of consumer price sensitivity and subsequently will be unable to hit collection targets as old units stay in service longer. If the federal government takes this action, it will affect the speed at which utility-driven energy efficiency programs and the installing HVAC industry replace thermostats. All tariffed consumer goods are subject to some price sensitivity and thermostats are no different than any other consumer good.

“It’s my hope that the Trump administration will reconsider these proposed tariffs and pursue policies that enhance U.S. competitiveness rather than reduce access to foreign markets,” Kiscaden said. “Let us all hope that President Trump’s negotiating tactic to get China to the table is successful and that these tariffs are subsequently rescinded.”

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Publication date: 04/26/18