Season Group Already Seeing Effect of US Tariff Changes

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Season Group is already seeing a significant surge in enquiries as a result of the changes in US Tariffs with China.

“When the initial tariff changes were announced in July, we saw very little change in customer behavior. The feedback that we were getting was that customers expected this to be a short-term situation. However, now that some US companies have seen large-scale invoices for their imports from China from the first round of tariffs, the increase in their scope means that there appears to be an urgency to find alternative sources to avoid these significant cost increases. Given that Season is one of very few EMS companies of its size that has an EMS footprint in Malaysia, Mexico, USA, UK as well as China, we are being seen as a 'safe haven' for many small and medium-sized companies that are currently sourcing with companies that have only one site in China. We are getting feedback that the number of options is also important as there is a fear of 'where next' given previous concern over US duties related to Mexico (for The Wall) and current NAFTA negotiations with Canada,” said Carl Hung, president and CEO of Season Group.

“We have never had a Sales Funnel of the size that it is now. It stands at the equivalent of our annual revenue – with a number of large opportunities due to be added very soon. What I find particularly interesting is that even European companies that source in China are looking at their EMS strategy – concerned that the single-site China EMS companies, with whom they are currently working, could be adversely affected if their US revenues collapse. In addition, the fact that we also have a China operation appears attractive to customers as it can help organize the initial transfer as well as providing an option if the tariffs are ever reversed,” added Charles Tonna, VP Business Operations and Strategy.