So, to encourage manufacturers in the US to build more stuff in the US, they will increase tariffs on components so that it will cost even more to build something in the US than to build it in China.
I am in the middle of starting a business around a product that will get slammed by this. I was going to import the components and have the boards built here.("Made in the USA" labels are huge for my target market.)
Assuming I am parsing all of this correctly it will end up being better for me to have the PCBs assembled into the products in China and not create jobs in the USA.
You can't use the "Made in the USA" label like that anyway. It must be all or virtually all made in the USA. At best you could label it "Made in USA from Imported Parts" or "Assembled in USA."
My intention was that the casing and PCBs would be made in the USA. The only China sourced parts would be the PCB components.(Not finalized/assembled PCBs.) As far as I know that would qualify for "Made in the USA".
You are 100% correct in this. You can call your device just fine as made in the USA even if your passives, ICs and so on come from elsewhere. The other commenters don't understand anything about electronics.
* PCB (Milled, Drilled, Components Soldered) - USA Origin
* Connectors - USA Origin
* Firmware - USA Origin
* PCB Components (Items affected by the tariffs) - China or Otherwise
As far as I know that would qualify as "Made in the USA" or at the minimum "Assembled in the USA". Over 75% of the components have USA origins and the final transformative step is done in the USA.
Please note that I am not trying to be deceptive in my future product's labeling.(6+ months until launch.) However, with political changes like these tariffs they are something that can basically change my stance on how I decide to source in the USA.
Who wrote that horrible document? How exactly does someone determine whether "All or virtually all" is applicable in their situation without specific values. Sure there are examples, but they are not exhaustive.
In Canada the definitions are simple and clear:
A "Product of Canada" must have its final transformation done in Canada, and at least 98% of the costs are incurred in Canada
Something "Made in Canada" is as above, except the value is 51% and includes a statement about whether imported parts were used.
Wait, a second... Do you really know this? Have your supplier prices already increased? By how much on average of each imported component? What's the total increase per unit shipped?
Yeah, I'm worried because a nonprofit I'm working for recently decided to manufacture a convention badge in Ohio rather than China because it was barely economically feasible... with this tariff change it may eat too far into our donations.
Just an aside, I used to work at a custom label printing place (in Ohio even, funny that), which often got convention orders because they had holograms on them.
I think security around conventions can be concern (you don't want someone doctoring a phony badge and walking into a convention with a few thousand people.
Sorry to hear you're getting hit by this! I wrote the Verge piece, and would love to talk to you about how this is affecting your business plans. Drop me a line at russell@theverge.com.
Are we to infer that BOM is the big cost for you, even though you're doing all the manufacture in USA? That seems unlikely to me, based on what I've heard about electronics manufacturing.
> The United States today released a list of products imported from China to the US on which additional tariffs will be placed as a measure aimed at pressuring China to change its practices the US says force US companies to give up intellectual property and transfer technology. Some industries have been dropped form the list such as pharmaceuticals, while a new list has now been announced, officials told reporters this morning. This story is developing and will be further updated shortly.
> A US official speaking on background as a “senior administration official” told reporters on a short-notice phone call today that China is using state-funded companies to outbid US companies, and is intruding and stealing IP from companies.
> USTR last year launched a “Section 301” investigation into China’s practices on technology transfer and intellectual property and concluded that it has long been engaging in unfair practices. The Section 301 report found China guilty of pressuring US companies to partner with Chinese companies, licence under less favourable terms than Chinese companies, using state-funding to buy US companies in order to get ahold of their IP, and engaging in intrusion and theft to get commercial advantage.
> The United States has raised these concerns for years, and gave China the chance to take steps to resolve the concerns, the official said, but “that’s not what they did.”
You realize that Democrats are supporting these tarrifs on China as well. China has already won the trade war by dumping steel and aluminum and stealing intellectual property for decades. This isn't even controversal.
Why would the comment distract? It's not a contentious issue, but the bipartisan support has less visibility because it's almost solely attributed to Trump.
I can't speak specifically to these new items, but just to give an example, many auto experts came out and said the steel and aluminum tarrifs would raise car prices, but so small it's a rounding error. Typically under $100 or $200 per car.
Point being, people jump to conclusions without seeing the impact on the total cost of goods. Meanwhile dismissing the point, putting more capital into the pockets of US based companies which improves the economy.
This will eat into profits for US based electronics manufacturers, who in many cases may already be under contract for assemblies or finished products at particular price points. It will also make it even more uneconomical to manufacture electronics assemblies or finished products in the US, a business that has been drying up for years.
You can't just look at the end product, you have to see the tariffs' impact all the way down the supply chain.
The effect on the final product may be minimal but the intermediate manufacturer of, e.g., the rails that hold the car seats in place may end up having to lay off half their workforce. If the product that makes up 80% of your business has a 15% margin and now your main raw material input rises in price by 25%, you could be in serious trouble.
So let me ask you, do you think the people in charge do not know this? Do you buy into the media push that Trump is a petulant, reactive child who does not listen to advisers? Do you think our government is truly led by the whims of a single individual?
Tariffs are a political tool. There is some objective here that is not being publicly outlined because it would defeat the purpose of the strategy.
Example: Other countries involved in this "trade war" are placing tariffs specifically on bourbon. Why? What do they have to gain by that sort of rule? Absolutely nothing, other than putting political pressure on the representatives and senators from Kentucky. (Source: NPR, radio earlier this month where a representative of Canada said exactly this. I wish I could find the audio.) This is the very definition of other sovereign countries interfering with American politics. I would bet that the tariffs being placed here locally are designed to have similar effects.
I mean, I can answer those questions, but the OP comment was a critique of the policy, not the policy makers.
Yes, I understand that perhaps OP's comment might have been influenced by the policy maker, but nothing in their post makes any mention of anything beyond a simple policy critique, so this line of argumentation is, at best, putting words in their mouth.
If a policy is, to one's opinion, good or bad, then it should not matter whether or not the policy was proposed by someone we like or someone we hate, and to that end, it shouldn't matter one whit how popularly supported it is by our legislators, even where that popularity is enjoyed across partisan lines.
Arguing against a policy critique with a critique (or commendation) of the policy-makers is totally non-sequitur.
Your argument is that there's some super-intelligent strategy at work here but it must be kept secret in order for it to work.
This is literally baseless nonsense.
America has a single goal that is beyond transparent: prevent the rise of Chinese apex-technological manufacturers. Everything was okay when China was making shoes and Christmas lights but now they're fabricating increasingly sophisticated computer chips [0], producing more electronic cars than the rest of the world combined [1], and kicking out all sorts of fancy 5G telecom equipment that does more but costs significantly less than what Western manufactuers can offer [2].
The "strategy" here is too little and far too late. Trump's only victory here will be, like so many other victories, purely symbolic: his base might get riled up and support him for taking on the "Chinese" who "stole" all their jobs... but China's competitiveness here won't be affected. Cutting off Americans from China's competitive electronics will just drive up prices in America and make American companies less competitive on the global market. The rest of the world (the other 7.3 billion on the planet) absolutely love China's cheap but capable electronic products. The only thing at this point that will actually stop China's growth here is literal bombs and tanks.
Good plan, hello Canada!