Tariffs Already Impacting Industry

While current world events and an onslaught of other headlines have pushed the tariff saga to the background, the security industry is already feeling the impact of the tariffs that went into effect in April, with many manufacturers implementing across-the-board price increases, while others add an extra line item for the tariffs that can be removed or changed based on how tariff negotiations go and final numbers and percentages are settled on.

The results of the Locksmith Ledger News Poll on the topic show that the majority of respondents are already being impacted by the current tariffs, with many raising prices and even considering new sources for where they get their products.

When asked what impact the tariffs are having, nearly three-quarters (70 percent) say they are having an impact on their business, with 40 percent of that number saying “some impact” and the other 30 percent saying the tariffs are having a “major impact.” In addition, 60 percent of respondents say they have had to raise prices, with 40 percent of that number raising prices more than 10% and the remaining 20 percent raising their prices more than 20%.

Interestingly, when asked — “Are you looking for new partners or sources for products and supplies that are impacted by the price increases?” — 40 percent said “yes,” with another 40 percent saying, “possibly in the future,” leaving only 20 percent who are not considering making a change.  

“This situation underscores the importance of robust cost and expense management for businesses,” says Chad Lingafelt, managing partner, Loc-Doc Security, who spoke with Locksmith Ledger about the possible impacts of the tariffs when they first hit. “We're currently conducting an expense audit and have been tracking line-item costs for several years. This practice enables us to adjust our pricing in real-time as costs increase. While manufacturer price increases are inevitable, vigilant monitoring and measurement can prevent them from impacting our profitability.”

Industry Takes Action

The Security Industry Association (SIA) has been tracking the tariffs from day one and recently sent a letter to U.S. Trade Representative Jamieson Greer and U.S. Secretary of Commerce Howard Lutnick requesting relief from tariffs for security industry products and asking that the Trump administration formulate a process that allows companies to apply for product-specific exemptions.

As SIA points out, the security industry is an important segment of the U.S. economy, contributing more than $430 billion in total economic impact and supporting more than 2.1 million jobs. Manufacturers and security professionals who provide “essential life safety and security products to American consumers are being put under enormous strain as they struggle to adapt to an uncertain and volatile trading environment,” SIA says, noting that not only do these tariffs hurt manufacturers by increasing the cost of key components as they compete globally, but the additional applicability to finished goods will directly increase the cost of essential security products, potentially pricing out integrators and reducing the availability of key products in the United States.

“While we understand that the Administration is leveraging tariffs to restore fairness in U.S. trade relationships and achieve other foreign policy goals, we are concerned that while negotiations are ongoing under the 90-day period directed by the President, the American public is left to face significant economic consequences,” says SIA CEO Don Erickson. “Unfortunately, the Administration’s global tariff policies do not adequately consider the global value chain for the development and manufacturing of security products and security systems integration. Not only do these tariffs hurt U.S. security manufacturers by increasing the cost of key components as they compete globally, but additional applicability to finished goods will directly increase the cost of essential security and life safety products that are widely utilized to protect communities and preserve public safety throughout the United States.”

As Erickson points out in the letter, for manufacturers, complex supply chains can take years to establish and cannot be shifted quickly without compromising contracts, quality and value for the consumer. “In many cases, there are few if any realistic alternative sources that can be pursued without significant supply chain disruption and increased costs,” he says. “It’s far more likely that U.S. security businesses and their customers will simply be forced to pay more, which affects business growth and consumer demand.”

SIA is requesting exemptions for imported components of security systems, security cameras, locks and other door hardware and equipment to include:

·       Alarm systems

·       Access control

·       Camera systems

·       Communications equipment and systems

·       Identity management solutions

·       Security-related uncrewed systems

·       Robotics

·       A range of other cutting-edge security solutions

“It is vitally important that the administration provide this relief to the security industry, and SIA will continue to advocate for this exemption to preserve some stability in the current international trading environment for the industry at large,” says SIA Senior Manager of Government Relations Lauren Bresette, who is actively working on this tariff issue. “SIA will continue to anonymously survey the industry and measure how tariffs are affecting our manufacturers and integrators, and we encourage you to reach out to our government relations team that you would like to share.”

Where Are We Now?

A lot has happened in the last few months since the tariffs were introduced in April with further actions on the horizon.

“After a chaotic few months of trade policy from the Trump administration, the security industry is carefully navigating the new international trade regime, while manufacturers and integrators keep a wary eye on potential new actions, including new trade deals, section 232 investigations, court actions and the looming July 9, 2025, suspension date for country-specific tariffs,” explains Bresette.

At SIA GovSummit 2025, a government security conference presented by SIA and held in Washington, D.C. on May 21, industry experts discussed the status of the Administration’s actions and insights for security manufacturers. The panelists included Dave McCarthy, program manager, government relations at Axis Communications; Bill Brennan, chair of the board at i-PRO Americas; Vada Garcia, specialist for policy and government affairs at the Consumer Technology Association; and Wes Sudduth, partner at Venable.

The panel discussed a timeline of the Trump administration’s second-term tariffs to date, tracking the initial China, Mexico, Canada tariffs and the United States-Mexico-Canada Agreement exclusion, Section 232 steel and aluminum tariffs, autos and auto part tariffs and the Liberation Day reciprocal tariffs announced on April 2.

In addition, SIA has been tracking the following key actions and deadlines:

·       On April 10, a 90-day pause on the higher “reciprocal” tariff rates proposed for 57 specific countries went into effect, buying time for leaders to negotiate more favorable deals. The deadline for this temporary relief to be lifted is July 9, 2025.

·       On April 29, the administration cleared up some confusion around the different tariff rates by preventing “stacking” so that goods subject to Section 232 tariffs would not be subject to the additional country-specific rates and vice versa.

·       On June 3, the Trump administration again adjusted the Section 232 steel and aluminum tariff rates from 25% to 50%.

The panel also discussed how manufacturers can navigate the disruptive environment by looking for ways that they can source goods domestically while still remaining competitive in the long run.

“In the short term, having to reevaluate resources and supply chains can lead to longer lead times, retractions and moving infrastructure, but the panel encouraged companies to take this as an opportunity to explore ways to put themselves in a better situation moving forward,” says Bresette. “For advice on how to manage an ever-changing environment, panelists suggested having a solid trade compliance team and a solid supply chain and sourcing team. These roles will continue to be important as companies need to maintain relationships with their customs brokers and ensure that they are compliant with all new regulations. There will be a renewed focus on enforcement with all these changes.”

Looking at what is next, “everyone is eyeing the trade deals that get struck over the next month to see which reciprocal tariffs will be going into effect when the suspension ends on July 9,” she says. “In the meantime, there are ongoing court challenges attempting to strike down the country-specific rates and several Section 232 investigations for the administration to consider further tariffs on copper, timber and lumber, semiconductors, pharmaceuticals, trucks, critical minerals and commercial aircraft.”

Stay tuned for more as this story unfolds.