Washington’s new tariffs on foreign drone components could reshape production strategies, pushing Taiwanese firms like Teco Electric & Machinery to evaluate establishing manufacturing bases in the United States amid national security concerns and trade tensions.
Teco Electric & Machinery Co. said it will examine whether to make drone components in the United States after Washington moved to impose tariffs of as much as 100% on certain unmanned aerial vehicle imports. The Taiwanese industrial group, which makes power systems for drones, said the change could force suppliers to rethink where they build and assemble parts as trade rules tighten around a technology that is increasingly tied to national security concerns.
According to the White House, drones and components from Taiwan will face a 15% tariff, while products from the European Union, Japan, South Korea, Switzerland and Liechtenstein will also be subject to that rate. Goods from the United Kingdom will be hit with a 10% tariff. The higher 100% duty will apply to drones with certain sizes or capabilities judged especially sensitive for national security. The measures take effect 21 days after the signing, while tariffs on less sensitive drone components will begin after 180 days.
Teco said it already operates a drone power systems base in Zhongli, in Taoyuan, and is now studying whether to establish a U.S. plant to soften the impact of the new duties. The company said the drones using its systems are mainly sold for commercial and agricultural work, including logistics, firefighting, disaster relief, solar panel cleaning and pesticide spraying.
Other Taiwanese suppliers gave a similar assessment of a policy shift that may matter as much for supply chains as for tariffs. Thunder Tiger Corp. said the move could encourage more U.S. production and help it win additional Pentagon orders as Washington seeks a trusted supply network less dependent on China. The company said it already has production lines in California and Ohio. CUB Elecparts Inc., which has entered the drone countermeasure business, said the new duties should not directly affect it because its products are not covered and the United States is not a major market. E-Lead Electronic Co. said it expects limited impact because Europe is its main drone market.
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