BANNOCKBURN, IL — IPC today issued a statement in support of a new trade deal to replace NAFTA but decrying the threat of new tariffs on imports from Mexico. The trade group said it supports the Trump administration’s efforts to pass the US-Mexico-Canada Agreement (USCMA) but believes the imposition of new tariffs on Mexican imports to address immigration issues at the US-Mexico border will harm US electronics companies and their customers.

“New and escalating tariffs would make it harder and more costly for electronics companies and their customers to operate in the United States and add to already-heightened economic uncertainties,” said John Mitchell, president and CEO, IPC. “Placing tariffs on Mexican imports would essentially be a new tax on US companies that have invested in North American supply chains and would weaken their ability to compete globally in an industry notorious for thin margins.”

According to a new IPC report, US electronics manufacturers and their customers have developed extensive North American supply chains over the last 25 years. These supply chains, which leverage the strengths of all three countries, have permitted US manufacturers to grow domestically and better compete internationally.

Among the report’s findings:

  • Bilateral trade between the US and its North American counterparts is now six times larger than it was prior to NAFTA.
  • The total value of US electronics trade with Canada and Mexico was $155.5 billion in 2017.
  • Electronics are a large share of US exports to Mexico and Canada, with 31% of all US exports of manufactured goods, natural resources and energy exports to Mexico, and 18% of such exports to Canada.
  • Within the computer and electronics product manufacturing sector, inter-firm trade between the US and Mexico is significant, says IPC. Approximately 78% of all electronics imported from Mexico and 47% of all electronics exported to Mexico are between parent companies and their affiliates.
  • Mexico imports 34% of US PCB production, which is larger than the next four largest markets combined.

IPC also believes the proposed tariffs would complicate efforts to win approval for USMCA in Congress.

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