FOS Capital Sees Silver Lining in U.S. Tariff Shake-Up

Key Highlights:

• FOS says 10% U.S. tariffs may enhance its competitive position
• Exported high-spec lighting products unlikely to face price pressure
• Global competitors hit with even steeper U.S. duties
• Company eyes upside in nascent markets like Italy, UK, UAE
   

FOS Capital Ltd (ASX: FOS) has struck a confident tone in response to newly announced U.S. tariffs, suggesting the changes could actually benefit the company’s competitive footing in international markets.

In a statement to the ASX on Thursday, the Australian lighting manufacturer confirmed that it expects to be a net beneficiary of the 10% tariff imposed on Australian-originating goods sold into the United States. While many exporters are expressing concern, FOS sees the development as an unexpected advantage.

“Our export products to the U.S. are high-performance and specification-grade, and are not typically price-sensitive,” said Managing Director Con Scrinis.

FOS’s U.S. sales totaled approximately A$2 million in 2024, representing 6% of its total revenue. These sales consist of specialist lighting products prized by engineers and architects—where quality often trumps price considerations.

Tariff Pressure Hits Global Competitors Harder

While Australia faces a 10% tariff, key competitors in the global lighting space are contending with higher rates, including a 20% tariff for EU imports, 10% for the UK, and a significant 26% for India. With no meaningful U.S.-based manufacturer producing similar products, FOS is well-positioned to fill a niche that avoids domestic competition and now holds a relative pricing advantage.

“It’s a rare case where trade policy may tilt in our favour,” Scrinis noted. “This could accelerate our brand visibility and market share in the U.S.”

Domestic Policy Tailwinds Also in Play

FOS also pointed to several recent Australian trade policies that support its export outlook. The proposed $1 billion export loan facility aimed at backing export-focused companies could provide crucial capital as the company eyes growth in nascent markets like Italy, the UK, and the UAE.

Additionally, the company welcomed the federal government’s ongoing campaigns to encourage the purchase of Australian-made goods, highlighting its unique position as one of the few lighting manufacturers operating locally.

However, FOS expressed skepticism regarding the federal government’s proposed $50 million allocation to industry bodies, saying it is unlikely to have a direct impact. The company instead suggested that payroll tax relief would offer more tangible support for domestic manufacturers.

Outlook

With international trade dynamics shifting and supply chains being redrawn, FOS appears poised to leverage its local manufacturing base, high-quality niche products, and emerging global demand to expand its footprint—particularly in the U.S. market, where competitors are increasingly constrained by tariffs.