HONG KONG – Donald Trump is pausing US tariffs on electronics as his administration prepares an investigation into the whole supply chain and semiconductor sector on national security grounds. That piles pressure on companies from Lenovo to Dell to disclose more information on where their goods are made.
Investors are scrambling to keep tabs on Trump’s trade war. On Friday, Washington declared exemptions for items including smartphones and laptops from reciprocal country-based tariffs, including a 145 percent hit on China which is a big supplier of electronics to the US On Sunday, Trump clarified that he plans to announce the tariff rate for semiconductors over the next week.
Many of the chips brought into the US come packaged into devices; computers alone account for around $100 billion of shipments in 2024, versus just over $80 billion for semiconductors. Deciphering the implications is further complicated by a lack of insight into where products come from.
Take the $13 billion Lenovo, whose shares have fallen some 20 percent since April 2. The Hong Kong-listed laptop maker, which reported around a third of sales in the Americas in the first half of last year, has more than 30 manufacturing facilities globally, but it does not break down where and in what quantities it produces notebooks and other devices.
That leaves investors and analysts hunting for clues. Last year, the group’s ESG report revealed more than 80 percent of Lenovo’s Scope 2 carbon emissions, which cover those from energy used at manufacturing facilities, came from mainland China. That suggests most of its production is in a country Washington dubs an “adversary”.
Rivals such as Dell and HP Inc are similarly light on numbers in filings, and outsourcing makes the risks even harder to parse. Such opacity also rules in the fashion and retail industries. Companies hold back from disclosing more because its gives them a competitive edge on costs.
It doesn’t have to be this way. Apple, which airlifted 600 tons of iPhones to the US from India to beat tariffs, states its production is located “primarily” in China and five other countries: Trump also hinted on Sunday that the $3 trillion company could benefit from some tariff flexibility. Automakers including Toyota and Hyundai share monthly updates on regional production, breaking down the number of units produced in different locations, or even plants. Pharmaceutical giants such as AstraZeneca list key manufacturing bases and lay out where each specific step in the drug-making process takes place. Trump’s trade onslaught is ugly but it will force companies to let in a little more light.
