The imposition of tariffs by the United States has once again stirred up the global trade landscape, with serious impacts on China and Southeast Asia. As a major producer of magnetic materials and components worldwide, what impact will the US tariff policy have on the industry? 

On April 2nd Eastern Time, US President Trump announced the implementation of a "reciprocal tariff" policy, which is one of the most aggressive trade protectionism measures taken by the United States in recent years. 

According to this policy, the United States will impose a base tariff of at least 10% on all trading partners and impose additional equivalent tariffs on multiple countries and regions, including China, the European Union, Japan, Vietnam, and others. Among them, Chinese goods are subject to a 34% equivalent tariff, and with the previous 20% tariff, the total tariff rate will reach 54%, which is expected to take effect on April 9th. 

This policy has caused severe fluctuations in the global market, with US stock futures plummeting, Nasdaq index futures falling more than 4%, and S&P 500 index futures falling 3.5%. Many countries around the world also strongly oppose the US tariff policy, believing that it will seriously undermine the free trade order and the stability of the global industrial and supply chains.

01 China and Southeast Asia become key areas affected by tariff policies 

For example, Vietnam has become an important transfer destination for global manufacturing in recent years, especially in the electronics sector. The United States has imposed high tariffs on Vietnam, possibly to curb the rapid rise of China's manufacturing industry and reduce its exports to the US market. 

Especially in recent years, magnetic component industry chain enterprises have sparked a wave of building factories in Southeast Asia. Previously, several companies building factories in Southeast Asia have expressed to "Magnetic Components and Power Supplies" that one of the reasons for building factories in Southeast Asia is to meet the needs of some customers and effectively cope with potential trade conflict risks in the future. They hope that magnetic component companies can have overseas magnetic component factory layouts to avoid trade risks. 

The manufacturing cost of domestic magnetic component enterprises in Southeast Asian countries is generally 5% -10% higher than that in China. At present, with the United States imposing higher tariffs on some Southeast Asian countries, the main destinations for Chinese companies to go abroad, such as Vietnam, Thailand, and Cambodia, no longer have significant tariff advantages compared to China, which may affect the strategic layout of magnetic component companies. 

02 has little direct impact on the magnetic component industry, but indirect impact is 100% 

The impact of this measure by the United States on China's manufacturing industry is very extensive. 

From the perspective of the magnetic component industry, China holds a dominant position in the global production of magnetic materials and core materials. According to relevant data, the production of magnetic materials in China accounts for over 70% of the world's production, and the production of magnetic core materials also accounts for over 60% of the global production. As the world's largest producer of magnetic components and materials, China's production far exceeds that of other countries and regions. 

Therefore, the policy of imposing tariffs by the United States is bound to have a profound impact on the magnetic component industry, not only affecting the direct export of magnetic component products to the United States, but also possibly affecting the global layout and cost structure of related downstream industries through industrial chain transmission. 

The imposition of tariffs by the United States has little direct impact on Chinese magnetic component industry chain enterprises, but the indirect impact is very significant, "an industry insider told" Magnetic Components and Power Supply ". 

Intuitively, the restrictions on magnetic components imposed by the United States seem to have limited impact on Chinese magnetic component companies, as the quantity of magnetic components and cores exported from China to the United States is not large. 

However, considering the export of products such as inductors, transformers, and power supplies, the indirect impact is actually significant. The United States has imposed tariffs on industries such as automobiles and power supplies, making the trade environment of related industrial chains more complex. As upstream suppliers of these terminal enterprises, the impact on Chinese magnetic component companies does exist, and the ways of impact may be direct or indirect.

Flat Transformer Diagram Source: Pujing Electronics Official Website 

For example, the United States has imposed high tariffs on products such as electric vehicles and lithium batteries, resulting in increased production costs for related end products, which in turn affects the procurement demand for upstream components such as magnetic components. Moreover, this impact involves a wide range of industries, not only limited to the magnetic component industry, but also affecting multiple fields such as electronics, automobiles, and new energy. 

The reason behind this is that China's overall economy belongs to an outward oriented economy. Taking the magnetic core industry as an example, the production of magnetic cores may have multiple destinations: one is to directly export magnetic cores; The second is to process the magnetic core into an inductor transformer and export it; The third is to process the magnetic core into an inductive transformer, then assemble it into a power plug, and finally export the power supply. That is to say, even if the magnetic core itself is not directly exported, the final product after processing may still be exported to the United States. 

For the United States, the main source of imports for power supplies, inductors, transformers, and magnetic materials is China. Because currently the entire magnetic component industry's industrial chain is mainly concentrated in China, with relatively fewer industrial chains in other countries.