|Moog is among the companies that stand to feel a dramatic impact from new tariffs.
Proposed Electronics Tariff Has
Wide-Ranging Industry Impact
A PROPOSED 25% TARIFF on electronic circuit boards and components imported from China could have a significant impact on many U.S.-made instruments and audio products. The large new import levy is designed to penalize China for discriminatory policies that the Trump administration says put U.S. companies at a disadvantage in the Chinese market. The President has complained that the Chinese government forces U.S. companies to surrender their proprietary technology in return for access to local customers and steals other trade secrets via cybertheft. However, the move could sharply raise costs for the many U.S.-based m.i. companies that incorporate Chinese-sourced components, sub-assemblies, and circuit boards in their products.
To cite just one industry example, synthesizer manufacturer Moog sources circuit boards from both U.S. and overseas manufacturers. However, the majority of the raw components in all its circuit boards come from China. As a result, the 25% tariff would have a significant impact on its production costs. A company spokesman said, “These tariffs will immediately and drastically increase the cost of building Moog instruments, forcing us to lay off American workers and move some, if not all, of our manufacturing overseas.”
The full effect of the tariffs, which went into effect on July 6, will take time to gauge. However, many observers suggest that American consumers will be hard hit. The tariffs are expected to weigh heaviest on companies like Apple, Dell, and Hewlett Packard, which rely on Chinese manufacturers.