To All Valued SMD Inc. Business Partners,

On July 6th, per the US Trade Representative Section 301, a 25% tariff will be imposed on specific products manufactured in China entering into the United States. The list included 818 product lines identified by HTS codes. There is a link below that can help to explain more details.

 

The  SMD Inc. team  has been working on an implementation of these new tariffs and gathering information from all authorized suppliers on specific part numbers that are affected. There are still many missing details and critical information needed from our suppliers before we can implement these tariffs into our system and process.  We do have a number of suppliers whose products are made exclusively in countries outside of China that will not be affected.

 

SMD Inc. is working with our suppliers to understand their various approaches. To provide an adjustment period during this situation, SMD Inc. will not pass on any Section 301 tariff charges until sometime in August 2018 and will continue to  absorb these tariffs during this period of time. We have been in contact with a number of customers, competitors and outside agencies and will be trying to develop and follow a standard practice of billing tariffs separately. The exception would be for parts where suppliers have chosen to increase the price per part, in which case we will have no choice but to pass these increases along in the piece price. The general opinion so far would be to keep the tariff charge on its own line item which reduces the supply chain impact and is the least disruptive option from a systems, process and accounting standpoint.

 

Many of our suppliers produce components in multiple countries. It is not always known until time of receipt/shipment if the Country of Origin on the components being shipped will be China or another country. For this reason, we will not always know the Country

of Origin at time of order placement and or the Tariff implication. 

 

Our top priority is ourpartnerships and relationships we have with our customers by providing the best customer service and supply-chain management at all times.We will be contacting our customers to let them know which products are impacted as soon as the information becomes available over the next few weeks. In some cases, these tariffs will need to be charged on existing backlog.

 

These tariff issues and the implementation processes, will be addressed by all your suppliers in the coming weeks.

 

We will continue to provide more detailed information as developments unfold.  In the meantime, please let us know if you have questions.

 

Thank you,

SMD Inc. Team