U.S. import tariffs are expected to change significantly in early 2025, with proposed rates of up to 60% on Chinese imports — the highest levels the country has seen since the 1930s. These changes will affect manufacturing costs and operations for companies with international supply chains, particularly those producing goods in China.
This presents clear challenges for companies who rely on the global electronics supply chain, who will need to evaluate options around cost management and supply chain adjustments. With changes expected around January 20th, 2025, it’s essential to start preparing immediately.
Strengthening our global supply chain
At Particle, we’ve developed a comprehensive plan to diversify our manufacturing and supply chain operations by collaborating with our contract manufacturers (CMs) to transition from a reliance on Chinese operations to alternative locations.
For example, our key contract manufacturing partner has multiple locations. While we are currently based in China, our partnership allowed us to successfully pilot a transition project in October.
Particle’s other key manufacturing partnerships provide us with additional options, including locations in Mexico, a Malaysian facility (operational in Q1 2025), and U.S.-based operations in Ohio. While we’ve laid the groundwork for these manufacturing alternatives, fully implementing them at scale requires careful planning and execution over the coming months.
Taking action: What you should know
Supply chains typically require 12-18 months to adjust and mitigate major changes in trade conditions. Given the uncertainty around future trade policy, we recommend building inventory safety stock to ensure adequate time for adjustment and operations management.
Given the time it will take to implement changes to any supply chain and the current structure of the global electronics supply chain, our recommendation to our customers is to secure enough supply to support sales through 2025. In predictable environments, tightly managing inventory turns leads to efficient use of capital; however, we are entering a time of uncertainty and therefore need to adjust our approach to risk management. Continuity of supply and cost control in the coming weeks and months will not only protect your business, it has the potential to create a competitive advantage if trade policy drives new costs into your market.
- Inventory planning: Build additional safety stock to offer a buffer during any transition period
- Contract review: Update and extend supplier agreements to include provisions for pricing stability
- Supply chain assessment: Evaluate current supply chain dependencies and identify opportunities for diversification
Particle for long-term success
While 2025’s potential tariffs and trade changes present new challenges, Particle has already built the foundations for stability through manufacturing diversity and strategic planning. Our proactive approach demonstrates how companies can effectively prepare for these changes while ensuring business continuity, enabling Particle to continue delivering reliable connected solutions regardless of changing trade conditions.
Want to learn more? Let’s talk. If you are an existing customer or prospect, reach out to your account team for more details and other steps you can take to protect your business.