IPC Update on the Latest U.S.– China Trade Announcement

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On June 12, the Trump Administration announced an agreement to implement the framework of the trade deal with China reached earlier in May. Reports indicate the following high-level terms:

• A 55% combined tariff on imports from China

• • 10% “reciprocal” tariffs under the International Emergency Economic Powers Act (IEEPA),
  • 20% IEEPA-based fentanyl tariffs, and
  • Existing Section 301 tariffs, which in many cases are 25%.
    This structure largely reflects the status quo as of May 14 for many electronics-related imports.

• China has reportedly agreed to resume exports of rare earth minerals for six months. 
• The U.S. is reportedly open to negotiations that may ease certain semiconductor-related export controls 

Of note, the legal status of the 10% and 20% IEEPA tariffs remains unresolved. The 10% “reciprocal” and 20% fentanyl-related tariffs are currently the subject of ongoing litigation. The U.S. Court of Appeals for the Federal Circuit has issued a temporary stay on a lower court’s ruling that had challenged the legality of these tariffs. The parties will be arguing before the appeals court on an expedited schedule this summer, with a decision expected sometime after July. The IEEPA tariffs remain in effect as that legal challenge proceeds.

Chris Mitchell, Vice President of Global Relations and advocacy for the association had this to say, “IPC, the global electronics trade association, welcomes the announcement by United States and China on a deal to implement a framework for resolving trade tensions. We encourage the administration to continue reducing and eliminating harmful tariffs and to strengthen the domestic electronics supply chain through the development of a national electronics manufacturing strategy that builds critical capabilities and capacity through investment acceleration, smart tax incentives, and targeted national security investments.”

IPC members should continue to comply with all U.S. Customs and Border Protection (CBP) regulations and pay all applicable duties. At the same time, members should work with their trade counsel or customs broker to understand relevant customs procedures and deadlines. If these tariffs are overturned at a later date, customs experts advise that companies seeking refunds may still be bound by the protest and filing deadlines outlined in CBP regulations.

Likewise, IPC members should be wary of suppliers who offer deals that seem too good to be true, for example delivered duty paid (DDP) goods at suspiciously low prices. If your supplier commits fraud, you are liable as the importer. The administration has publicly committed to stringent customs enforcement and written harsh penalties into tariff executive orders. 

As the global trade association for the electronics manufacturing industry, IPC continues to closely monitor these developments and voice the concerns of industry to policymakers on Capitol Hill and within the Administration. IPC calls for the elimination of harmful tariffs and for the development and implementation of a proactive national electronics manufacturing strategy that incentivizes the revitalization of domestic electronics capabilities through smart incentives and investments including: 

Unleash Investment in Electronics Industry 

1. Pass H.R. 3597 – the Protecting Circuit Boards and Substrates Act 
2. Extend and optimize 48D Advanced Manufacturing Credit to incentivize domestic substrate, PCB, and PCBA manufacturing 

Secure the National Defense Supply Chain 

3. Restore and bolster funding by $1B  under the Defense Production Act for PCB and advanced packaging manufacturing in the United States. 
4. Specify PCB and PCBA manufacturing as covered technology categories to be prioritized by supply chain investments including through the Office of Strategic Capital. 
5. Boost the demand signal for domestic substrates by authorizing the stockpiling of U.S.-made substrates

Build Talent Pipelines and Career Pathways 

6. Pass Workforce Pell and prioritize funding for industry-recognized workforce training
7. Fully fund and promote the widespread adoption of apprenticeship for electronics manufacturing careers

IPC will continue to engage with policymakers and legal experts, providing members with timely updates as more information becomes available. For questions or to share input on your company’s needs, please contact IPC’s government relations team at Advocacy@ipc.org.