Tariffs Crush Small Electronic Business
- James Wiebe
- 5 minutes ago
- 3 min read
Although we've done final assembly for our electronic products (even hand-building many products over the years) Radiant does procure PCB assemblies from China. I'd be happy to use another country for production, even move it to the USA if it was cost-effective. As this is low "value-add" work, I'd prefer to have it done in countries with lower labor rates than the USA. Moving this work to the USA will push inflation through increased Cost Of Assembly and Cost Of Goods.
Here's where we are at:
On April 2, 2025, the President of the United States issued an Executive Order imposing a 10% tariff on all products imported into the United States. This new tariff rate went into effect on April 5, 2025, at 12:01 a.m.
Additionally, on April 9, 2025, country-specific tariff rates for 60 countries took effect. These rates are enumerated in Annex I of the Executive Order.
Annex II identifies 8-digit Harmonized Tariff Codes that are not subject to these increased rates.
Annex III, published shortly after, outlined the ad valorem Chapter 99 codes to which the new tariff rates would apply, as well as the Chapter 99 exemption HTS codes for products already loaded onto final mode of transport between April 5 and April 9.
On April 8, the People's Republic of China (PRC) responded with a reciprocal increase on U.S. exports, matching the United States' increase of 34%. The United States responded with notice that, if this was not immediately withdrawn, a subsequent rate increase would be published to take effect on April 9.
Of course, that happened.
Later on April 8, the amended Executive Order was released, increasing the rate from 34% to 84%, representing a 50% hike.
As of April 9, the PRC indicated its intention to proceed with a similar 50% increase on all U.S. exports to China.
On April 9, 2025, the United States announced an immediate increase in tariffs on China-origin goods to 125%, in response to China raising tariffs on U.S. exports to 84%.
At the same time, the U.S. paused reciprocal tariff increases for all countries—excluding China, Mexico, and Canada—capping their rates at 10% for the next 90 days while negotiations are underway.
The tariff rates enacted in February—including a 20% tariff on all China-origin goods under IEEPA, and a 25% tariff on goods originating from Canada and Mexico—remain in effect, as do any Section 301 tariffs on China-origin goods.
Most of the inventory Radiant is currently selling was landed without tariff cost. Where I no longer have inventory, I've raised prices (and likely killed some or all sales) to cover my increased costs.
An excellent example is our Fuel Probe System, which uses American technology (designed by me) to interpolate a fuel tank pressure sensor (built in China). My cost on this probe was $40, and after my markup and my distribution markup, the retail price point was $100 on the probe.
My new cost of procurement hovers around $100 including the last round of tariffs. I raised my sell price to $180 on the probes but really don't expect any orders at that price. My distributor, Aircraft Spruce, still has inventory at the lower price point. At the factory, I have no inventory, nor will I place new orders with my vendor.
Trump bailed out Dell, HP, and Apple when he rescinded most of the most onerous tariffs on computers and smart phones, but he hasn't done anything to provide hope for small electronic businesses such as Radiant, short of raising prices and hoping consumers buy in at the higher price points.
If you were in my shoes, what would you do?