BANNOCKBURN, IL – The chief executive of IPC has submitted comments to the US Trade Representative decrying the potential impact of proposed tariff rate increases on Chinese imports to US businesses.
In a May 11 letter to Robert Lighthizer, IPC president and CEO John Mitchell said the proposed action "will inflict significant and long-term harm on many small- and medium-sized US electronics manufacturers that rely on Chinese materials, components and equipment to produce their products and compete in the global marketplace."
In his letter, Mitchell noted the thin margins of many electronics supply chain companies, adding that they survive only through diligent cost cutting and customer responsiveness. "The proposed action will increase production costs, delay product deliveries, and disrupt supply chains, imperiling US manufacturers and the jobs they provide," Mitchell asserted.
The USTR announced the tax hikes in response to concerns over China’s technology transfer policies, which in many cases are designed to prop up Chinese national businesses.
Instead of tax hikes, IPC is pushing the USTR to pursue bilateral negotiation and multilateral trade agreements, or to exempt raw materials and components that are typically sourced only from China.
An IPC survey of US members indicated 87% of respondents import raw materials, components or equipment from China. Some 35% said the impact would be severe and could endanger their companies, 23% anticipate a moderate impact, and 42% indicated the negative impacts would be minimal.
Of those companies that rated the impact low, many expressed confidence that they could restructure their supply chain and pass costs along to their customers, Mitchell said. And a few believed the tariffs would help their businesses.
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