US Announces Withdraw From Postal Treaty; International Shipping Prices Expected to Rise

The United States has announced plans to withdraw from a 144-year postal treaty that sets lower international shipping rates. The US claims this treaty gives countries like China and Singapore an unfair advantage that floods the US market with cheap packages. The BBC reports the withdraw of this treaty will increase shipping costs from China by between 40% and 70%.

The treaty in question is the Universal Postal Union, which established that each country should retain all money it has collected for international postage. The US Chamber of Commerce has said this treaty, ‘leads to the United States essentially paying for Chinese shipping’. This is especially true since 2010, when the US Postal Service entered an agreement with eBay Greater China & Southeast Asia and the China Post Express & Logistics Corporation. This agreement established e-packet delivery where packages weighing up to 2 kg would be delivered at lower prices. If you have ordered inexpensive products shipped from abroad, it is likely the e-packet price that made this possible.

This will affect businesses that capitalize on imports and exports; the storefronts on Amazon and eBay that resell Chinese goods rely on cheap shipping from China. It will also affect companies based outside of the United States that ship to US customers. Small businesses within the US who manufacture at low enough quantities to get their components/raw-materials shipped under the e-packet rates will also see a hit. An increase in shipping costs will mean higher prices for all of these products.

The move is also being justified as a way to even the playing field for US manufacturers who are shipping from within the US and may be paying higher rates to ship to the same customers as foreign-bought goods. It is the latest development in a growing trade war between the US and China which has already seen several rounds of tarrifs on goods like electronics, and even 3D printing filament. It’s hard to see how the compounding effect of these will be anything but higher prices for consumers. Manufacturers seeing the pinch on raw materials and components will pass this on to customers who will also soon see higher shipping prices than they are used to.

The Challenges of Shipping From China – Life of a Flailing Tube Man

Last summer was an exercise in developing a completely different kind of product from my normal wheelhouse; a costume. My Halloween costume had been so popular that I decided to have a go at commercializing it, and that took me on a path into manufacturing that I hadn’t yet taken; shipping by boat from China. The short version is it’s a ridiculously difficult mess. Continue reading “The Challenges of Shipping From China – Life of a Flailing Tube Man”

Tariff Expansion Set to Hit 3D-Printing Right in the Filament

Mere weeks after tariffs were put into place raising the cost of many Chinese-sourced electronics components by 25%, a second round of tariffs is scheduled to begin that will deal yet another blow to hackers. And this time it hits right at the heart of our community: 3D-printing.

A quick scan down the final tariff list posted by the Office of the US Trade Representative doesn’t reveal an obvious cause for concern. In among the hundreds of specific items listed one will not spot “Filaments for additive manufacturing” or anything else that suggests that 3D-printing supplies are being targeted. But hidden in the second list of tariff items, wedged into what looks like a polymer chemist’s shopping list, are a few entries for “Monofilaments with cross-section dimension over 1 mm.” Uh-oh!

Continue reading “Tariff Expansion Set to Hit 3D-Printing Right in the Filament”

Electronics Manufacturers React To China Trade Tariffs

Mere weeks ago, the United States announced it was set to impose a 25% tariff on over 800 categories of Chinese goods. These tariffs include nearly every component that goes into the manufacture of any piece of electronic hardware, from resistors to capacitors, semiconductors to microcontrollers, and even the raw components that are turned into printed circuit boards. These tariffs will increase the cost of materials for electronics, even if those electronics are ultimately manufactured in the United States because suppliers and subcontractors must source their materials from somewhere, and more often than not, that place is China.

Now, manufacturers are feeling the pinch. An email distributed by Moog Music last Friday has asked their supporters to contact their senators and representatives.

In the world of musical synthesizers, there is no bigger name than Moog. The company was founded in the 1950s manufacturing theremins, and in the 1960s, production moved to synthesizers. The famous Minimoog, launched in 1970, has been featured on tens of thousands of albums. Modern music simply wouldn’t exist without Moog synthesizers. After a buyout, mismanagement, and bankruptcy in the 1980s, the company was reborn in the early 2000s, moved into a beautiful factory in Asheville, North Carolina, and has gone on to produce some of the most popular synthesizers ever made.

The company’s statement says these new tariffs will, ‘immediately and drastically increase the cost of building our instruments, and have the very real potential of forcing us to lay off workers and could.. require us to move some, if not all, of our manufacturing overseas’. In a statement on Twitter, Moog says they source half their PCBs and a majority of other materials domestically, already paying up to 30% more than if the PCBs were sourced from China. However, because the raw materials for PCB manufacture are also sourced from China, board manufacturers for Moog’s synths will be forced to pass along the 25% tariff to their customers.

The threat of Moog being forced to move production of their instruments to China is real. Like cell phones, laptops, and other finished goods, synthesizers are not covered by the new tariff. As noted by Bunnie Huang, these tariffs have the perverse incentive of shifting US manufacturing jobs to China.

These tariffs have been a point of contention for the electronics and engineering communities. Anyone can easily pull up the distributor information from a Mouser or Digikey order and find the country of origin for an entire Bill of Materials. It has already been confirmed that most of the FR4 and other raw components that go into manufacturing PCBs in the United States come from Chinese suppliers. These items can be cross-referenced with the list of items that will be subject to a 25% tariff next week. Manufacturing electronics in the United States, even if you get your PCBs from US manufacturers and parts from US suppliers, will cost more in just a few short days.

Bunnie Weighs in on Tariffs

[Bunnie] has penned his thoughts on the new 25% tariffs coming to many goods shipped from China to the US. Living and working both in the US and China, [Bunnie] has a unique view of manufacturing and trade between the two countries. The creator of Novena and Chumby, he’s also written the definitive guide on Shenzen electronics.

All the marked items are included in the new tariffs

The new US tariffs come into effect on July 6th. We covered the issue last week, but Bunnie has gone in-depth and really illustrates how these taxes will have a terrible impact on the maker community. Components like LEDs, resistors, capacitors, and PCBs will be taxed at the new higher rate. On the flip side, Tariffs on many finished consumer goods such as cell phone will remain unchanged.

As [Bunnie] illustrates, this hurts small companies buying components. Startups buying subassemblies from China will be hit as well. Educators buying parts kits for their classes also face the tax hike. Who won’t be impacted? Companies building finished goods. If the last screw of your device is installed in China, there is no tax. If it is installed in the USA, then you’ll pay 25% more on your Bill of Materials (BOM). This incentivizes moving assembly offshore.

What will be the end result of all these changes? [Bunnie] takes a note from Brazil’s history with a look at a PC ISA network card. With DIP chips and all through-hole discrete components, it looks like a typical 80’s design. As it turns out the card was made in 1992. Brazil had similar protectionist tariffs on high-tech goods back in the 1980’s. As a result, they lagged behind the rest of the world in technology. [Bunnie] hopes these new tariffs don’t cause the same thing to happen to America.

[Thanks to [Robert] and [Christian] for sending this in]

Making Electronics Just Got 25% More Expensive In The US

As reported by the BBC, the United States is set to impose a 25% tariff on over 800 categories of Chinese goods. The tariffs are due to come into effect in three weeks, on July 6th. Thousands of different products are covered under this new tariff, and by every account, electronic designers will be hit hard. Your BOM cost just increased by 25%.

The reason for this tariff is laid out in a report (PDF) from the Office of the United States Trade Representative. In short, this tariff is retaliation for the Chinese government subsidizing businesses to steal market share and as punishment for stealing IP. As for what products will now receive the 25% tariff, a partial list is available here (PDF). The most interesting product, by far, is nuclear reactors. This is a very specific list; one line item is, ‘multiphase AC motors, with an output exceeding 746 Watts but not exceeding 750 Watts’.

Of importance to Hackaday readers is the list of electronic components covered by the new tariff. Tantalum capacitors are covered, as are ceramic caps. Metal oxide resistors are covered. LEDs, integrated circuits including processors, controllers, and memories, and printed circuit assemblies are covered under this tariff. In short, nearly every bit that goes into anything electronic is covered.

This will hurt all electronics manufacturers in the United States. For a quick example, I’m working on a project using half a million LEDs. I bought these LEDs (120 reels) two months ago for a few thousand dollars. This was a fantastic buy; half a million of the cheapest LEDs I could find on Mouser would cost seventeen thousand dollars. Sourcing from China saved thousands, and if I were to do this again, I may be hit with a 25% tariff. Of course; the price on the parts from Mouser will also go up — Kingbright LEDs are also made in China. Right now, I have $3000 worth of ESP-12e modules sitting on my desk. If I bought these three weeks from now, these reels of WiFi modules would cost $3750.

There are stories of a few low-volume manufacturers based in the United States getting around customs and import duties. One of these stories involves the inexplicable use of the boxes Beats headphones come in. But (proper) electronics manufacturing isn’t usually done by simply throwing money at random people in China or committing customs fraud. These tariffs will hit US-based electronics manufacturers hard, and the margins on electronics may not be high enough to absorb a 25% increase in the cost of materials.

Electronics made in America just got 25% more expensive to produce.

Taking a U2F Hardware Key from Design to Production

Building a circuit from prototyping to printed circuit board assembly is within the reach of pretty much anyone with the will to get the job done. If that turns out to be something that everyone else wants, though, the job gets suddenly much more complex. This is what happened to [Conor], who started with an idea to create two-factor authentication tokens and ended up manufacturing an selling them on Amazon. He documented his trials and tribulations along the way, it’s both an interesting and perhaps cautionary tale.

[Conor]’s tokens themselves are interesting in their simplicity: they use an Atmel ATECC508A specifically designed for P-256 signatures and keys, a the cheapest USB-enabled microcontroller he could find: a Silicon Labs EFM8UB1. His original idea was to solder all of the tokens over the course of one night, which is of course overly optimistic. Instead, he had the tokens fabricated and assembled before being shipped to him for programming.

Normally the programming step would be straightforward, but using identical pieces of software for every token would compromise their security. He wrote a script based on the Atmel chip and creates a unique attestation certificate for each one. He was able to cut a significant amount of time off of the programming step by using the computed values with a programming jig he built to flash three units concurrently. This follows the same testing and programming path that [Bob Baddeley] advocated for in his Tools of the Trade series.

From there [Conor] just needed to get set up with Amazon. This was a process worthy of its own novel, with Amazon requiring an interesting amount of paperwork from [Conor] before he was able to proceed. Then there was an issue of an import tariff, but all-in-all everything seems to have gone pretty smoothly.

Creating a product from scratch like this can be an involved process. In this case it sounds like [Conor] extracted value from having gone through the entire process himself. But he also talks about a best-case-scenario margin of about 43%. That’s a tough bottom line but a good lesson anyone looking at building low-cost electronics.