US President Donald Trump has long suspect China of unfair trading practices and intellectual property theft. In China, there's a perception that America is creating an effort to curb its rise. so far the US Delivers rounds of a tariff, putting charges of up to 25% to 30% on imported Chinese goods and products. China hit back with tariff starting from 5% to 25% on US Electronics and other supply chain products.
So, What're the impacts? The impact has been felt across a variety of sectors, as well as electronics, fab tools, materials, and semiconductors. every sector is complex and it would take time to unravel the Complex. Plus, the situation is fluid and could change overnight.
Impacts on OEM/EMS Supply chain:
- Tariffs have affected procurement prices, product design, Component Sourcing, and production timing. With 25 % of tariffs currently levied on Chinese products. Now it increases up to 30% on $250 billion on Chinese goods.
- George Whittier, president, and COO of U.S. electronics design and the manufacturing firm Morey Corp. said, "if manufacturers decide not to source from China, there could be a sudden shortage of PCBs and other electronic components assembly. Because more than 50 percent of PCBs are manufactured in China.”
- Chipmakers and electronics manufacturers that depend on China for sales, like NVIDIA Corp., Micron Technology and Intel Corp. are seen as especially vulnerable in a trade war scenario.
- Major OEMs and contract manufacturers are thinking to shifts out of China, but plans are still largely in the pipeline. Laptop maker Inventec Corp. said it will shift production of notebooks for the U.S. market out of China within few months.
- Both Countries depend on each other, so the implementation of tariff creates a challenge for distributors also. Both in components and manufacturing assemblies we will find huge issues said, Reuben Townsend, Director at Nano Components Pty Ltd Australia.
US President Donald Trump has long suspect China of unfair trading practices and intellectual property theft. In China, there's a perception that America is creating an effort to curb its rise. so far the US Delivers rounds of a tariff, putting charges of up to 25% to 30% on imported Chinese goods and products. China hit back with tariff starting from 5% to 25% on US Electronics and other supply chain products.
So, What're the impacts? The impact has been felt across a variety of sectors, as well as electronics, fab tools, materials, and semiconductors. every sector is complex and it would take time to unravel the Complex. Plus, the situation is fluid and could change overnight.
Impacts on OEM/EMS Supply chain:
Tariffs have affected procurement prices, product design, Component Sourcing, and production timing. With 25 % of tariffs currently levied on Chinese products. Now it increases up to 30% on $250 billion on Chinese goods.
George Whittier, president, and COO of U.S. electronics design and the manufacturing firm Morey Corp. said, "if manufacturers decide not to source from China, there could be a sudden shortage of PCBs and other electronic components assembly. Because more than 50 percent of PCBs are manufactured in China.”
Chipmakers and electronics manufacturers that depend on China for sales, like NVIDIA Corp., Micron Technology and Intel Corp. are seen as especially vulnerable in a trade war scenario.
Major OEMs and contract manufacturers are thinking to shifts out of China, but plans are still largely in the pipeline. Laptop maker Inventec Corp. said it will shift production of notebooks for the U.S. market out of China within few months.
Both Countries depend on each other, so the implementation of tariff creates a challenge for distributors also. Both in components and manufacturing assemblies we will find huge issues said, Reuben Townsend, Director at Nano Components Pty Ltd Australia.
Impacts on the Mobile Phone Industry:
This trade war already affected the smartphone market also. The government new trade sanction will be especially problematic for large firms like Apple as its latest iPhone model (iPhone-XR) was a poor seller due to its high price point.
Impacts on Automotive industry:
One of the biggest area affected by trade tension is the Automotive Industry supply chain, Carla Bailo, Center for Automotive Research's CEO and President, said, “Prices will rise for U.S. consumers even if they buy a U.S.-built vehicle, due to the share of imported parts content used in U.S. production.”
The impacts of the tariff can be on any sector depends on how much tariff is applied on goods, materials, semiconductors, electronics, Automotive, etc. but overall it will disturb the globally connected supply chain. Hope you will get an idea where the supply chain industry is today, but there might be variations in the impacts when the next round of tariff will announce.