Spirit of ’76 Fireworks updates during the 2019 and 2020 winter months regarding fireworks production and tariffs.
Published January 23, 2020:
We have been trying to keep our customers informed on the issues impacting 2020 fireworks production and delivery. This is one of a series of updates we have posted to keep you informed on the issues impacting 2020 fireworks production and delivery.
The end of 2019 was an eventful time in the fireworks industry. The looming 15% tariff on fireworks was dropped at the last minute, which was a win for the industry. This was overshadowed by an earlier accident at a fireworks factory on December 4th which led to the closure of all fireworks factories in Liuyang. For more information on these, see our post published December 21 (included below).
Since our last post, factories in Liuyang were allowed 5 days (December 24-29) to complete partially finished firework items, clean-up, and store materials. During this period there was a second accident which led to all fireworks factories in Liuyang being closed again on December 27.
These two accidents have caused significant challenges for Chinese fireworks manufacturers. The weeks leading up to Chinese New Year are typically used to produce fireworks for the US market. The shutdown caused by these two accidents means that there have been only a couple work days for fireworks factories in Liuyang (which produces 50%+ of US fireworks) since December 4 th . Now that the Chinese New Year Holiday has started, factories will not open until workers return in February at the earliest.
Even after Chinese New Year, there are many factors that will make it hard for factories to reopen.
- Factories in Liuyang are required to apply for and pass a rigorous inspection before they are allowed to reopen
- On March 5th, all fireworks factories will close for the annual government meetings in Beijing and are expected to stay closed for 10-14 days
- Regulations are expected to change in March, so factories are waiting to see the new regulations before applying for new permits
Chinese officials are also discussing how to handle storage and transportation of certain fireworks going forward. China and the US have different rules and classifications for fireworks. Generally, this impacts the larger fireworks devices (500 gram multi-shots with less that 20 shots and canister shells). If Chinese factories and warehouses are required to follow all Chinese regulations for foreign-market goods, the number of factories and warehouses that can handle these types of items will be reduced.
We have been in frequent communications with our suppliers assessing how these events may impact 2020 fulfillment. Based on the information provided by our suppliers we expect that the entire industry will experience product shortages for the 4 th of July season; the only unknown is the severity.
While this news is somewhat dreary, there are some positives to report. Spirit already has a lot of items in stock and we are expecting delivery of approximately 40,000 more cases in February. We are also continuing to press our suppliers to maximize fulfillment of the remainder of our orders. Due to all of these issues, we urge our customers to place your 2020 orders early.
We are hopeful that production in Liuyang will resume quickly as these issues impact all fireworks importers. We know this issue is important to our customers and we will post updates throughout the spring as more information becomes available.
Published December 21, 2019:
Update on Fireworks Tariff and China Production
FIREWORK TARIFF . We have some great news to share. NO NEW TARIFF ON FIREWORKS. As we reported earlier, a 15% tariff was scheduled to go into effect on Dec 15 th . On December 13th the United States and China entered into a trade deal which removed the tariff on fireworks before they went into effect.
CHINA PRODUCTION . On Dec 4 th , 2019 there was an explosion at a fireworks factory in Liuyang, Hunan Province, killing at least 7 people and injuring more. Due to the severity of the accident, all factories in Liuyang were forced to close down. As a result, factories must go through a thorough inspection before they are allowed to reopen. Our suppliers expect this to be a lengthy process with many factories not opening until after the Chinese New Year celebration in February. It is still unclear, but our suppliers have indicated that this recent accident may have an effect on factories in other provinces as well.
WHAT THIS MEANS TO YOU. Barring any unforeseen problems, fireworks prices for 2020 should remain fairly flat. However, with factories shut down in August, September, and part of October , many fireworks manufacturers were already behind schedule. The recent accident and subsequent factory closings has only exacerbated the production problem in China. Spirit of ‘76 predicts that fireworks fulfillment from China will be delayed this year and that, across the industry, many items will sell out prior to the 4 th of July.
We encourage our customers to submit their orders early to reserve inventory for the June/July selling season.
Published November 1, 2019:
A Letter To Our Customers: Fireworks Tariffs
We have an important update regarding US tariffs on fireworks to share with you.
On September 15, 2019, a 15% tariff went into effect for the following items: sparklers, poppers, fuse, tubes (fiberglass, HDPE), and racks.
We will be holding our prices on these items until November 15.
In the meantime, we highly encourage you to take advantage of the current pricing on these items.
We also want you to be aware that another 15% tariff is scheduled to go into place for all fireworks on December 15, 2019.