Radio Frequency Identification Devices
Sourcing Guide & Market Intelligence

Canada and Mexico tariffs to negatively impact the electronics industry

• On March 4, 2025, the US imposed a 25.0% tariff on goods imported from Mexico and Canada, which applies in addition to other duties or fees that are in place, with limited exceptions for electronics products. However, as of March 6, 2025, all goods compliant with the United States-Mexico-Canada Agreement (USMCA) will be exempt from tariffs until April 2, 2025.
• After the tariff took effect, Canada immediately imposed 25.0% tariffs on goods imported from the United States. Mexico also announced plans to impose retaliatory tariffs and non-tariff measures on imports from the United States later this month.
• According to the US Census Bureau, the United States imported $87.1 billion in electronics, or 18.2% of goods, from Mexico in 2024, and $11.2 billion in electronics, or 2.3% of goods, from Canada. Many electronics manufacturers are based in Mexico due to the logistical advantages and low labor costs, and 89.0% of Mexican exports of electrical and electronic equipment are destined for the United States.
• Electronics retailers are warning of higher prices with the new tariff as upstream vendors pass along higher costs. Best Buy CEO Corie Barry reported that Mexico is the second largest source for products sold by their company, and price increases are expected.
• Due to the integrated nature of the electronics production chain in North America, the impact of tariffs will result in supply chain disruptions and higher costs as supply chains are restructured to mitigate tariff-related costs. According to the Joint Economic Committee, computers, phones, and other electronics could see price increases of up to 11.0%.

United States announces additional tariffs on China

• In February 2025, the United States announced 10.0% tariffs on imports from China, which took effect on February 4, 2025. In late February 2025, the United States announced an additional 10.0% tariff on imports from China, which took effect on March 4, 2025.
• The tariff plan applies to all merchandise imported for consumption and applies in addition to other duties and fees that are in place, with limited exceptions.
• In response, China announced a 15.0% tariff on products such as coal and natural gas, as well as a 10.0% tariff on crude oil, agricultural machinery, pickup trucks, and large cars. The tariff executive orders indicate retaliatory tariffs could lead to further escalation in rates.
• One of the three executive orders passed suspended the Section 321 de minimis shipment exemption (often applying to e-commerce packages), subjecting all shipments under $800 to relevant tariffs. However, on February 7th, this executive order was suspended until new systems are put into place to properly process and collect tariff revenues.
• This market sources goods from China. As such, ProcurementIQ will continue to monitor developments in this space and update analysis accordingly.

China bans exports of rare minerals to the United States

• On December 4, China announced a ban on all exports of gallium, germanium, graphite, and antimony to the United States, escalating existing trade restrictions on these materials.
• China is the leading global producer of each of these metals, producing 98.3%, 67.9%, 62.0%, and 48.2%, respectively, of the world’s gallium, germanium, graphite, and antimony supplies, respectively.
• The United States can still access these resources from other trade partners who make up most of the remaining global supply of the impacted commodities, such as Canada, Japan, and Brazil.
• However, the loss of supply from China, the leading producer of these materials, will increase prices and supply chain risk in a range of markets that rely on the affected metals, such as the semiconductor, batteries, and solar cell markets.
• China’s export ban on these materials is in retaliation to expanded US export bans on advanced semiconductor manufacturing equipment and technologies to China announced two days prior. This ongoing trade dispute adds further uncertainty to technology markets, which are often reliant on components and materials exported from China.