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The Government Circuit: Three Inescapable Conclusions About Global Trade Policies

Amid a series of recent moves by U.S. President Donald Trump to escalate trade policy pressure on key U.S. partners, including Europe, Canada, Mexico, Japan, and Malaysia, the Global Electronics Association’s recent report¹ on global trade flows in the electronics industry is overflowing with relevant insights. 

The main message is that electronics supply chains are more globally integrated than any other industry, surpassing even the automotive sector in cross-border complexity. Moreover, trade in inputs like semiconductors and connectors now exceeds trade in finished products such as smartphones and laptops. All electronics-related trade totaled $4.5 trillion in 2023, and $2.5 trillion of that was in components alone.

Three conclusions seem inescapable to me.  

First, no nation or company can dominate the electronics supply chain alone. The sheer complexity and global integration of electronics manufacturing make self-sufficiency a myth. Even if all the efforts underway around the world to boost domestic manufacturing succeed, electronics will still be an intrinsically global industry. 

Second, to be a leader in electronics production, any given nation must also be a major importer. That is, every major exporter of electronics goods is also a major importer of the electronics components that go into those goods. Trade is not a weakness; it’s a prerequisite. 

Third, resilience won’t come from building walls around prosperous islands. It will come from clarity, cooperation, and smart, strategic integration, often across borders. Success in tech will favor those who manage interdependence wisely.

Tariffs on allies may grab headlines, but the real pressure is on the United States to prove it is still a place where electronics manufacturing can thrive. That will only happen if U.S. government policy supports investments in manufacturing and continues to tap into, not turn away from, the global supply chain. 

The electronics industry urges President Trump to pursue trade agreements that strengthen ties with key partners while also prioritizing a national electronics strategy. Such a strategy should focus on building U.S. capabilities and expanding manufacturing capacity, so that America can once again produce all the systems it designs for use in national defense, critical infrastructure, and everyday life. 

By the way: Global interdependence is also a key reason IPC recently relaunched itself as the Global Electronics Association. Amid all the disruption and shifts occurring in our industry in many nations, our association has changed its name and is boosting the resources we allocate to advocacy, industry insights, and stakeholder communications—all aimed at advancing and elevating the electronics industry for the benefit of all people and all nations. 

Trade Turmoil Resumes  
As I write this, the global electronics industry remains caught in the crossfire as President Trump extended his July 9 “reciprocal” tariffs deadline to Aug. 1, leaving about two weeks to reach multiple trade deals with key nations before sweeping new duties take effect. 

In recent days, the president has also said he will raise the global baseline tariffs from 10% today to as high as 20% and raise tariffs on the European Union, Canada, and Mexico to 30%. Trump’s announcement of a 50% tariff on imported copper, effective Aug. 1, sent U.S. copper futures soaring to record highs. With limited domestic smelting and refining capacity, the short-term impacts of the copper tariff could include higher costs for critical industries, including electronics, which depend on copper for circuit boards, wiring, power systems, and thermal management. 

The Global Electronics Association is closely tracking the situation and urging U.S. trade officials to exempt key manufacturing inputs such as semiconductors, PCBs, electronics-grade copper, and specialized equipment. These goods are essential to sustaining onshore electronics production. Tariff-related disruptions could undermine the industry's competitiveness. 

‘Big Beautiful Bill’ Includes Good News for Electronics  
On the positive side, the “One Big Beautiful Bill Act” (OBBBA) that Trump signed into law on July 4 includes several key provisions championed by the Global Electronics Association. 

• Restores and makes permanent 100% bonus depreciation for capital equipment, giving U.S. manufacturers long-term certainty as they modernize and expand production lines.
• Restores and makes permanent immediate expensing of domestic R&D costs, encouraging sustained innovation and investment that fuels U.S. technology leadership.
• Preserves the 21% corporate tax rate, helping the U.S. remain competitive in the global marketplace, especially in capital-intensive sectors like electronics.
• Extends the 199A pass-through deduction, enabling small and mid-sized businesses to reinvest in equipment, talent, and growth. Small- and medium-sized businesses make up 80% of our membership and are vital drivers of national economic strength.
• Altogether, the business tax provisions of the OBBBA lay the groundwork for a broader strategy to build a strong, resilient, and innovative domestic electronics industrial base.

U.S. House Defense Bill May Be Positive for Electronics
On another potentially upbeat trend, the U.S. House Appropriations Committee recently passed its version of the FY26 defense spending bill, which includes $321 million in Defense Production Act purchases. This is approximately $84 million above the President’s FY26 budget request but significantly below the FY24 and F25 enacted levels. 

The bill does not include a specific line item for PCB manufacturing, as called for by our industry. However, the bill does include $97.7 million for the Defense Credit Program to invest in the industrial base, a sign that Congress will continue to boost U.S. manufacturing capabilities. These programs have previously supported reshoring efforts in PCBs and advanced packaging, which are critical technologies that underpin defense readiness. 

In a recent op-ed,² U.S. Partnership for Assured Electronics (USPAE) Executive Director Jim Will called for urgent action to strengthen America’s “fragile” defense electronics supply chain. The paper outlined five steps to build a stronger foundation: map at-risk components, fund domestic demonstrators, build the full supply chain beyond chips, enable scale through commercial viability, and hold integrators accountable. 

The Global Electronics Association will be working to ensure that PCBs, advanced packaging, and other electronics technologies are part of the defense funding conversation. 

Other Nations Not Waiting to Build Up Electronics
Meanwhile, other nations and regional blocs are moving decisively to build up their own electronics manufacturing ecosystems. 

For example, in Mexico, key industries like automotive, aerospace, and electronics continue to reinforce Mexico’s relevance in global industrial supply chains. In Hidalgo, Giant Motors Latin America has announced a 3 billion MXN investment to develop a new electric vehicle platform in partnership with local suppliers. The project aims to localize production, reduce vehicle costs, and position Hidalgo as a new node in the country’s expanding EV ecosystem³.

Meanwhile, aerospace investment in Baja California rose by 25 percent in 2024⁴. The surge reflects growing interest in the Tijuana aerospace cluster, driven by its skilled labor pool, binational connectivity, and cost efficiency. 

Across the Pacific, Malaysia and China are entering what officials have called a “new era of cooperation,” with strengthened bilateral ties focused on technology, infrastructure, and industrial investment. Recent meetings between senior government and industry leaders from both countries emphasized alignment in high-value sectors, including semiconductors, smart manufacturing, and green technologies⁵. 

Vietnam is taking new steps to strengthen its role in the global electronics supply chain. Foxconn is partnering with Vietnamese authorities to support education in semiconductor-related skills, aligning with national goals to produce 50,000 semiconductor engineers by 2030⁶.

Vietnam is also navigating trade complexities within the ASEAN region. Non-tariff barriers, including technical standards, customs delays, and regulatory divergence, continue to impact cross-border electronics trade. Industry stakeholders and policymakers are calling for greater transparency and harmonization to improve intra-ASEAN trade flows⁷.  

For electronics companies, these trends may present new sourcing, workforce, and partnership considerations in emerging regions. 

Industry Partners Convene Summit on European Defense Electronics 
On the European continent, the Global Electronics Association and the Aerospace, Security and Defense Industries Association of Europe (ASD) jointly hosted the first Europe Defense Electronics Summit, bringing together 70 leaders from across the electronics manufacturing supply chain. Participants included OEMs, EMS providers, PCB and semiconductor manufacturers, and wire harness suppliers, alongside 10 senior policymakers, including representatives from the Cabinet of the Commissioner for Defense and Space and three European Commission directorates general.

The discussion focused on the challenges facing Europe’s defense electronics base and the urgent need for a more resilient ecosystem. Industry leaders emphasized the strategic importance of electronics to Europe’s security goals and called for this to be reflected in future policy and investment decisions⁸.

Stay Tuned for Advocacy Opportunities 
With so many important issues resembling boiling kettles on a global stovetop—from trade agreements and tariffs to tax changes and government budgets—electronics manufacturers should stand by to help us advocate for our industry. To learn more and get involved in our efforts:

Find us and follow us on LinkedIn.  

Reach out to speak with us. We’re listening.

Peruse our global Advocacy pages on electronics.org and follow the links to information about our work in North America, Europe, and Asia.

Subscribe to receive the Global Advocacy Report by email. 

Then get ready to make your voice heard!

Please contact us if you have any questions or insights to share.

References

1. “Interconnected: Global Electronics Trade in an Age of Disruption,” authored by the Global Electronics Association.
2. “Enough Talk—Time to Strengthen America’s Microelectronics Industrial Base,” by Jim Will, June 9, 2025.
3. “Hidalgo will receive 3 billion pesos from Giant Motors to boost the electric car industry,” by Israel Molina, Mexico Industry, June 30, 2025.
4. “Baja California’s aerospace investment increases by 25%,” Mexico Now, July 3, 2025.
5. “Malaysia-China Trade Ties Strengthened Amid New Era of Cooperation, Says INSKEN Chair,” by Shahrizal, Business Today Malaysia, June 30, 2025.
6. “Foxconn ready to help Vietnam train technology workforce,” by Binh Minh, Vietnam Today, June 27, 2025.
7. “Actions needed to overcome non-tariff barriers within ASEAN,” by Phuong Hoa, Vietnam Economic Times, June 27, 2025.
8. “European Defence Industry Faces Critical Need for Electronics Made in Europe, According to New Report,” March 18, 2025.

Chris Mitchell is VP of global government affairs for the Global Electronics Association. Contact him at ChrisMitchell@electronics.org.