The scale of the tariffs is honestly hard to fathom and I think we’re just seeing it as consumers (speaking from the US perspective, though this is going to hit everyone, IMO, in some way). Obviously it is a higher potential shock to the supply chain and in flight materials for production. As Jesse points out, even best efforts to comply would never work in the timelines that have been given.
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Indeed. At a 104% tariff, my prices will have to basically double. I don’t know if I have business left. It’s not even clear to me that this is the worst of it. Trade wars don’t have winners.
We assemble Joulescopes here in the USA. However 95% of the components come from overseas. For the time being, semiconductors are excluded from the tariffs, but the indication is that they are coming. All other components like connectors and discretes are already included. Our carry case and extrusion are also now taxed at 104% like most goods coming from China.
The stated objective of these “big beautiful” tariffs is to bring manufacturing back to the US. What business is going to fully invest when you have no idea whether this goes away tomorrow, in six months, or as soon as Trump leaves office? Undoing an executive order is simply another executive order, and moving the electronics component supply chain back to the USA will take many years.
The irony is that we are considering moving manufacturing OUT of the USA because of tariffs!
More than half of our sales are international, and we are (were?) a net exporter. Assuming our government stays the course and other countries enact retaliatory tariffs, our international customers would pay double tariffs. It may make sense to move to a country that is still international friendly but with lower USA tariffs, like Mexico. I have no viable option for purchasing Joulescope components from USA sources in any timeframe that matters to my business, so USA customers will have tariffs either way…
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I agree the tariffs will damage everyone involved in the economy in the long term. I say that though as someone whose favourite news source is the economist (a magazine founded to argue against tariffs).
I was wondering that as a Canadian who generally uses Digikey what other options are there. I have looked for canadian distributors but not found many, so I am leaning towards dealing with the lead times from china.
I’m only a hobbyist at this point so it isn’t as big of a deal for me as it is for those manufacuturing products.
Not just ironic - this is actually the best course of action with current tariffs, even if you were entirely selling to us customers, which makes it even crazier.
If you assemble in Mexico or Canada, and add enough value there you can claim USMCA status, you are in the narrow exemption area. The input parts wouldn’t be tariffed since they aren’t going to US, and then you can import your product under USMCA w/o tarrifs. I’m of course worried that will change since we use Mouser as our main international distributor… but for now the world crashes around us…
FYI the distributors have some level of bonded warehouse area, where they don’t apply the tariff’s until it ships, and if going out of country they won’t apply. In talking to them they were focused on high-value/high-volume/physically small parts (especially e.g., microcontrollers/FPGAs/ICs in general). They may of course expand some of this to cover more, but keep an eye out as you may pay less for parts in Canada even from Digikey/Mouser than if shipping to US.
I’m waiting for some of the international distributors to start doing “non-US source” shipping to Canada, as they also have connections (e.g., Newark & Farnell being connected already, you can order from Farnell UK stock but right now it goes to US first).
Anyway best of luck to everyone!
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I included a brief tariff discussion in the latest April 2025 Joulescope Newsletter. Scroll to the Tariffs and Pricing section at the end.
Not much new from our prior discussion. The uncertainty makes new product planning very challenging.
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When the first round of tariffs happened in 2018 I took some steps to find SMT production outside of China and ended up deciding to build in the Philippines. TBH, it was a ton of work and even more risk. The benefits really were not that substantial. The issue there was that PH added their own VAT to all of the parts that I important into their country (similar to China’s 13% VAT). It felt like their workforce was always on some week long holiday and exporting goods and subsequently importing them to US had equal pain to CN. Ultimately it made more sense to move back to China with a CM that I had a relationship with their US owner.
Also when our Tundra Tracker product was rolling out I made the decision to spread inventory over many 3PLs in Europe, UK, Canada, Australia and Hong Kong. The theory was that it alleviate customers needing to manage their import duties and remove the hop through the US. Unfortunately this was also an epic fail because it was 4x more difficult to import goods into those 3PLs without having an in country registration there. That resulted in certain shipments getting held in customs, filing a bunch of paperwork and company registrations and then paying significant VAT to those respective countries for their taxes.
My experience is just that the grass isn’t really any greener elsewhere. It is just trading off one set of tax complications for another. Sure there are theoretical optimizations but it only matters if you are all in on setting up the organization to utilize them and have the scale to justify that cost. (similar to the Digikey FTZ decision)
It sucks that it is happening but also, it is happening most places so it becomes the new table stakes for this moment in time. Hopefully we are at peak tariffs.
I lost a lot of sleep over it back then but don’t lose much this time around. Will just power through and let the storm pass. As recent as last week I received a large shipment of product, still waiting for the bill from UPS. I have no clue if it is coming or not. Over the past 4 years, It has always been arbitrary, sometimes it is zero, sometimes it is $500 a few times it has been a few thousand, I sort of expect the same this time despite the scary numbers like 145%.
I think as engineers we have a propensity to engineer solutions to things like this and preventatively try to avoid things that in practice may not actually have the impacts that we imagine.
I also heard from our Chinese shipping agent that freight costs are soaring right now because everyone is rushing to export goods (presumably before enforcement of tariffs actually get implemented)
Best to just not get distracted from building your product and business, let the competition get wrapped up in it while you leap ahead. While price increases may feel existential, they have always been easier to implement than I imagined.
Luke, well said.
I have my product PCBAs built in China and have spent a fair amount of time in the last few weeks looking at several other SEA countries as well as US based manufacturing. Frankly, I was underwhelmed by the response from various SEA companies. And US assemblers look to pretty uniformly cost about 5X plus BOMs fulfilled by US distis are a lot higher than China.
Despite the craziness of all the tariff posturing, I believe it has to eventually settle down. I got a bunch of inventory in this recent lull so I can coast for maybe a month or so. But I am not going order anything more until it becomes clear that tariffs won’t keep changing. The last thing I want to is get some inventory with a high tariff on it and see the tariff drop and leave me with in the lurch. Stability is important here.
This is a particular hobby horse of mine. If I buy the same part made by a US manufacturer in volume direct from that manufacturer, my US price is 2 - 3X that of delivery in China. Other tell me they see as little as 15-20% premium. If I’m buy parts fabbed down the street why is this true? I know they all go to Maylasia to be packaged, but it still makes no sense other than “they can.”