The electronics industry has been especially affected by the most recent trade war and tariff hike. Some of these businesses are looking for ways to mitigate their rising costs, and reducing personnel is a serious contender. According to an industry survey, companies in this sector are investing less, slowing down hiring and, in some instances, laying off employees as a result of these tariffs. Electronic manufacturing companies move incredible amounts of raw materials in and out of the country and many of them are sourced in China. With these rising tariffs, business owners are being forced to make difficult decisions during a time that they should be enjoying rising profits. An executive of VirTex, a Texas-based electronics manufacturer, said they paid almost 200k in tariff costs last month in an attempt to help their clients stay happy.
Another IPC survey revealed that many of these companies are struggling with finding ways to hedge against these unpredictable costs and that passing them onto their clients was simply not an option. According to this survey, 70% of the businesses that participated have stated that these tariffs have eroded their profits and more than half of them are now looking to source materials outside of China. As an American business owner, you should not have to make these kinds of decisions and should be able to focus your energy on growing your business. This trade war environment continues to choke the American business and, in turn, the American consumer.
What techniques have you looked at to help stem these rising tariff costs? What are you willing to sacrifice in order to protect profits and not shed clientele? Look around your business right now. How many of these people that rely on your decision making for their livelihood will have their lives completely changed as a result of layoffs or staff cuts? There may be another option for your business to remain profitable and navigate this tariff mind field successfully.
The experts at TriLink FTZ have strategic zones across the US designed specifically for your import and export business. By utilizing Foreign Trade Zones, you take back control of these outlandish expenses and are able to lower or delay them, while you focus on what you do best. Headlines like these continue to pour out from all over different media sources, targeted surveys and market research analytics and if you are not taking advantage of Foreign Trade Zones to gain a competitive advantage, you will be left behind and put in the precarious situation of deciding what level of compromise you will have to take, to keep your company, your employees and your family above water.
Published on October 25, 2019