As global supply chains continue to shift, US tariffs on electronics – particularly on components sourced from China – are becoming a critical cost driver for OEMs and electronics manufacturers. In this updated blog posting based on the latest data, Brian Lamers breaks down the issue.
While some electronics categories are exempt, key segments like Printed Circuit Boards (PCBs) and Printed Circuit Board Assemblies (PCBAs) remain heavily taxed. Here’s a breakdown of what’s currently exempt, what isn’t, and how manufacturers can take advantage of CHIPS Act Incentives to stay competitive.
Understanding the US Tariff Stack on Electronics (updated May 2025)
China-origin electronics are subject to the following layers of import duties:
- 50% Section 301 Tariff
- 20% IEEPA Emergency Tariff
- Reciprocal Tariff: Reduced to 10% for a 90-day period starting May 14, 2025
This temporary reduction stems from a 90-day agreement between the U.S. and China to ease trade tensions. However, it’s crucial to note that certain sector-specific tariffs, particularly those related to national security concerns (e.g., fentanyl-related products), remain in effect.
What’s Exempt Under the New US Electronics Tariff Policy?
The U.S. government published Annex II to Executive Order 14257, which includes a list of HTS codes exempt from the Reciprocal Tariff Policy. These exemptions offer targeted relief to strategic areas of the electronics supply chain, such as:
- Semiconductor devices (e.g., diodes, transistors, LEDs)
- Solid-state storage (SSDs, memory cards)
- Data processing equipment (servers, CPUs, peripheral parts)
- Telecommunication devices (routers, wireless modules)
- Flat panel and display modules
These categories have been prioritized to support CHIPS Act goals and preserve domestic access to advanced computing and semiconductor components.
PCB Tariffs and Exemptions: What’s Still Fully Taxed?
Despite advocacy from industry groups, relief for PCBs and PCBAs remains limited. The following products are still subject to a tariff burden when imported from China:
- Bare PCBs (2- and 4-layer) – Exempt through May 31, 2025
- 6+ layer rigid PCBs
- Fully assembled PCBAs
Beware of Dual Classification and Origin Pitfalls
Some assemblies may require dual classification, especially if they include control functionality or integrated circuits. Precise datasheets and part-level documentation are critical to avoiding misclassification, delays, or penalties.
Also note: Country of origin matters. A PCBA assembled in Vietnam using Chinese-origin PCBs may still trigger tariffs under US rules of origin.
Strategic Takeaways: How to Navigate Tariff Challenges
To reduce exposure and align with US policy incentives, manufacturers should consider these strategies:
- Reevaluate sourcing by identifying alternate countries of origin
- Consider domestic manufacturing to reduce tariff risk and boost CHIPS Act eligibility
- Engage early with EMS providers like SMT to align design, procurement, and logistics
- Monitor USTR for changes to duty rate and exemption lists
How SMT Supports Tariff-Smart Sourcing
At SMT, we understand that navigating tariffs isn’t just about knowing the numbers – it’s about having a proactive sourcing strategy. If you’re looking to reduce your tariff burden, we offer alternative sourcing options in Vietnam, Mexico, and the US to help shift away from China-origin components. For companies exploring reshoring or domestic production, SMT can align your builds with CHIPS Act incentives to support both compliance and cost-efficiency. From quick-turn prototypes to full-scale production, we provide flexible, transparent, end-to-end support throughout your product’s lifecycle.
Brian Lamers is the Chief Operating Officer (COO) and Vice President at Surface Mount Technology Corporation, an electronics manufacturing services (EMS) provider based in Appleton, Wisconsin. With a degree from the University of Wisconsin-Whitewater and extensive industry experience, Brian is passionate about driving operational excellence and innovation in manufacturing.
