Effective July 6, 2018, the U.S. Trade Representative (USTR) plans to proceed with “Section 301” Customs tariff increase of 25% on goods imported from China. These tariffs include nearly every component that goes into the manufacture of any piece of electronic hardware, from resistors to capacitors, semiconductors to microcontrollers, and even the raw components that are turned into printed circuit boards.
Under Section 301 Action, USTR Releases Proposed Tariff List on Chinese Products. All components produced in China and included in Section 301 will be subject to the new tariffs effective July 6. For the purpose of clarification, components manufactured in Taiwan and Hong Kong are not considered within the scope of Section 301, therefore are not subject to the additional tariff.
We recognize the entire industry is trying to understand the most economical supply chain route, while adhering to the guidelines of the law. The IBS Electronics Group is now being notified by suppliers as to how they intend to pass through the new tariffs.
Since many suppliers produce components in multiple countries it is unknown until time of receipt/shipment if the Country of Origin on the components being shipped will be China. For this reason our account managers and salespeople may not always know the Country of Origin at time of order placement. Because of the magnitude of the tariffs if the Country of Origin on the components being shipped to your company is China, IBS will have to begin passing through these tariffs on the effective date. We will continue to communicate with you as circumstances warrant further updates.