Tariffs on China Could Harm U.S. Electronics Companies

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IPC – Association Connecting Electronics Industries, the global industry association representing the $2 trillion global electronics industry, today warned that the Trump administration’s plan to impose higher tariffs on goods imported from China could harm many small- and medium-sized U.S. electronics manufacturers that rely on Chinese materials, components and equipment to produce their products. 

In comments submitted to U.S. Trade Representative Robert Lighthizer, IPC said a survey of its U.S. members found that 87% of them import raw materials, components, and/or equipment from China. Asked to rate the effect of these tariffs on their businesses on a scale of 0 (no impact) to 100 (threat to survival), 35% said the impact would be severe and could endanger their companies. About one-quarter (23%) predicted moderate impacts, and 42% indicated minimal impacts. Of those companies that rated the impact low, many expressed confidence that they could restructure their supply chains and pass costs along to their customers.

IPC survey respondents also expressed concern that the tariff increases would increase the cost of base materials to produce high-reliability electronics. Higher prices would depress demand among customers and make U.S. manufacturers less competitive in the global marketplace. Another respondent suggested the tariffs will create cost confusion in the marketplace and impose new administrative burdens as inventoried goods are mixed with newly imported goods.

Protection of intellectual property consistently ranks as a top priority for the electronics industry, and IPC maintains a set of industry standards and a certification program that enable electronics manufacturers to show how they are protecting their customers’ intellectual property. IPC also is working with the U.S. Department of Defense to develop a new standard on this issue.  

“As we work to address intellectual property issues, we must not further undermine U.S. companies by imposing increased costs on them,” writes IPC President and CEO John Mitchell. “Doing so will only weaken their competitiveness in the global economy and jeopardize their long-term sustainability at a time when the U.S. Government should be taking active measures to shore up the industrial base.

“Instead, IPC encourages the USTR to postpone new tariffs and prioritize bilateral negotiations with your Chinese counterparts and the pursuance of remedies under existing trade agreements,” Mitchell says.

About IPC

IPC is a global industry association based in Bannockburn, Ill., dedicated to the competitive excellence and financial success of its 4,300-member company sites which represent all facets of the electronics industry, including design, printed board manufacturing, electronics assembly and test. As a member-driven organization and leading source for industry standards, training, market research and public policy advocacy, IPC supports programs to meet the needs of an estimated $2 trillion global electronics industry. For more information, click here.