After the announcement on what Trump called “Liberation Day,” he introduced sweeping new tariffs—10% on all imports, and up to 54% for Chinese goods.
The move sent shockwaves through global markets and triggered uncertainty across supply chains.
Tariffs, Trade Tensions, and the Taiwan Factor
China is highly unlikely to just accept extreme tariffs. And China is too big to boycott. After some posturing, a deal will eventually be made, and I shudder at the concessions regarding Taiwan that might be given.
Why You Need a Portable Product Design
The best way to handle all this uncertainty is making sure your design is portable, so you can move assembly to wherever it’s not crazily tariffed.
We’ve written more on why design portability is now critical in a world of unpredictable tariffs.
If you’re stuck in the claws of a China ODM that still doesn’t have assembly in a third country set up, you need to get out ASAP.
You can make your factory an offer, they will understand, and should be happy to at least get to sell you the components.
Own Your IP and Your Supply Chain
If they don’t want to play ball, for anyone doing more than say $300k a year, now is the time to bite the bullet and invest in owning your firmware, BOM and molds.
That’s a big shift if you’ve relied on an ODM, but we’ve explained why that model no longer works for serious electronics companies.
Final Assembly Testing and Packaging (FATP) is relatively easy to move to a new country, if you keep things simple and organized.
If you’re not doing billions worth I recommend keeping logistics simple by continuing to buy a full kit of components from China. Molds too, they can eventually be shipped to your FATP location.
Quality Control for Remote FATP
Many smaller factories do QC as part of the assembly process. If the assembled unit works and looks okay it passes.
If you’re going to ship kits, you will ship individual components, and must make double sure that all components are there in the right quantities and quality.
Sending a container with 5,000 wrong housing parts back from, say, Mexico to China is not an option. Factories know this, so they’re not terribly motivated to do their QC for you.
How to Ensure QC Across Borders
This means you need to organize independent QC, especially on all custom mechanical components.
For this you will need detailed QC documentation:
- 2D drawings with critical dimensions, aesthetic pass/fail criteria, etc.
- A very detailed assembly SOP with lots of pictures
You also will want to ship over, or replicate, the assembly and testing jigs and software.
The Case for Flexibility
It is quite an effort, but looking at some of the numbers floating around it looks like it’s worth it to have that flexibility.
Besides avoiding tariffs, owning a portable design has the following advantages:
- Own the design IP, very important to get investment
- Design exactly the way you want it to be
- Don’t have your improvements leaked to competition buying from the same factory
- Have the freedom to move if you’re suffering from undue price creep or quality fade
- Etc
