If you've noticed unexpected fees on your recent invoices, especially on custom electronic products imported from China, you're not alone. These charges are not arbitrary; they stem from a series of U.S.-government-imposed tariffs that directly affect the global electronics supply chain.
Understanding where these tariffs come from, why they exist, and how they impact your costs is essential for making informed purchasing and sourcing decisions.
Why Do Tariffs Exist?
Tariffs are government-imposed taxes on imported goods. They're often used as tools to protect domestic industries, address unfair trade practices, or exert pressure in international negotiations.
In theory (which has been developed by people who have no experience in the manufacturing sector), tariffs level the playing field for American manufacturers. In practice, they do nothing more than raise the cost of doing business, especially for companies that rely on global supply chains to meet customer demand and stay price-competitive.
The Tariffs Affecting Epec’s Imports
At Epec, our commitment to delivering high-quality, cost-effective custom electronic products means navigating a complex landscape of international trade regulations.
Below are the primary tariffs currently impacting our imports from China:
1. Section 301 Tariffs
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- Charge: 25%
- Effective Since: September 2018
- Purpose: Initiated in response to findings from the U.S. Trade Representative’s investigation into China's practices related to technology transfer, intellectual property, and innovation. This tariff applies broadly across thousands of products imported from China, including many components used in electronics manufacturing.
2. IEEPA Fentanyl-Related Tariffs
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- Charge: 20%
- Effective Since: February/March 2025
- Purpose: Enforced under the International Emergency Economic Powers Act (IEEPA), this tariff targets specific Chinese industries linked (even indirectly) to the supply chain of illicit fentanyl. While not focused solely on electronics, the wide net cast by this policy has had ripple effects across multiple industries.
3. IEEPA Tariff #2
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- Charge: 125%
- Effective Since: April 2025
- Purpose: This second round of IEEPA tariffs reflects broader national security and foreign policy concerns. While the specifics are not always transparent, the impact is crystal clear: significantly higher costs on a large category of Chinese imports, including many critical electronic components.
Total Tariff Burden: 170%
When combined, these three tariffs amount to a 170% surcharge on qualifying imports from China, on top of standard duties, freight, and customs processing fees. And this comes at a time when U.S. manufacturing has been steadily declining over the past three years, driven by shrinking demand and limited support from federal policy. Instead of strengthening domestic production, these tariffs are compounding the challenges for manufacturers across the board.
Epec’s Response and Our Commitment to U.S. Manufacturing
At Epec, we’ve proudly owned and operated seven U.S. manufacturing facilities over the years, and we continue to operate three active plants across the country today. We prioritize building your products domestically whenever possible, and our U.S. plants play a key role in our overall value chain.
However, the hard truth is that for many types of custom electronics, manufacturing in the U.S. is significantly more expensive, often prohibitively so. For our customers to remain competitive in their markets, our global supply chain is essential. Even with the added burden of tariffs, importing from our overseas partners remains more cost-effective than domestic production for many product types.
Another major challenge our customers are facing is that the cost of all manufactured goods is rising, not just those coming from overseas. As global input costs surge due to these new tariffs, we’re seeing a ripple effect across the entire supply chain. This situation mirrors what we saw in the steel industry back in 2018, when tariffs on foreign steel led to a not-surprising outcome: the price of domestic steel increased even more than the tariff itself. The same pattern is now unfolding in other sectors, making it more expensive to produce virtually anything, regardless of where it’s made.
What You Can Do
Understanding these tariffs allows you to make smarter decisions on sourcing, budgeting, and planning.
Here are a few tips:
- Ask for clarity: Work with suppliers who are upfront about tariff-related charges.
- Review options: Explore domestic vs. offshore cost scenarios regularly.
- Plan for volatility: Keep tariffs in mind when forecasting future costs; they can change quickly.
What Epec Will Do
We are not sitting idle. At Epec, we have a dedicated team that monitors tariff policy developments on a daily basis. We also maintain active partnerships with several top-tier import/export law firms to ensure we have the most up-to-date and accurate information possible.
Our job is to make sure you are never caught off guard. If anything changes, whether it's a new policy, a revised rate, or a legal exemption, we’ll let you know right away. That’s our promise.
With our global supply chain, we will continue to evaluate and pursue the most cost-effective options available, especially in light of these new, burdensome tariffs. While we are proud to own and operate manufacturing facilities here in the U.S. and prioritize domestic production whenever feasible, the reality is that these rising costs make U.S.-based manufacturing increasingly difficult to justify for many projects.
That said, we've been in business for over 70 years. We've weathered economic shifts, policy changes, and global disruptions before, and we’ll navigate this one, too. Resilience and adaptability are part of who we are.
Summary
Tariffs are complicated, but your path forward doesn’t have to be. With the right partners and proactive strategies, you can navigate this environment without sacrificing quality or competitiveness.
