Rising Tariffs? Solutions from Taiwan and India
Tariffs are reshaping manufacturing supply chains, creating headaches for procurement teams. U.S.-China trade tensions have driven duties on $536.3 billion of 2022 imports to 10-25% under Section 301, inflating costs for components like gears and castings. Meanwhile, the U.S. International Trade Administration notes a trade-weighted average tariff of just 2.0% on industrial goods, with regions like Taiwan and India offering duties as low as 0-2%. These low-duty hubs provide a lifeline, delivering cost stability and quality amidst global trade volatility.
Rising tariffs hit procurement hard. A $100,000 shipment from a high-tariff zone like China incurs $10,000-$25,000 in duties per trip—multiply that across frequent imports, and margins erode fast. Lead times stretch as companies scramble to reroute supply chains, risking production delays. For industries relying on precision parts—think automotive engines or medical devices—cost spikes and shortages threaten operational efficiency. Taiwan and India counter these pressures with minimal duties (0-2%), leveraging favorable trade terms, advanced manufacturing in Taiwan, and India’s cost-competitive edge.
Sourcing from Taiwan and India offers a smart workaround. These regions produce high-quality components—machined castings, forgings, screw machine parts, shafts, and gears—without the tariff burden. A mid-sized order of 10,000 precision gears, for example, could see landed costs drop 15-20% compared to higher-tariff origins. This keeps budgets intact for critical applications like exhaust gas recirculation (EGR) valves or energy system shafts, ensuring procurement teams maintain supply without overstocking.
Stocking components domestically adds another layer of control. Our Warehouse facility in Freehold, New Jersey, holds parts from Taiwan and India for up to two months, cutting lead times and dodging repetitive shipping duties. That $100,000 shipment with a 10% tariff? Storing it stateside saves $10,000 per avoided trip—potentially $20,000+ annually on 10,000 gears. This setup ensures parts arrive when needed, supporting lean operations and freeing funds for innovation or competitive pricing.
Recent trends amplify these strategies. Supply chain digitization—think real-time tracking and AI-driven forecasting—is surging, with 73% of logistics leaders adopting digital tools in 2024 (per SCMR). Pairing this with low-duty sourcing streamlines procurement decisions. Sustainability also gains traction, as 68% of manufacturers prioritize eco-friendly supply chains (McKinsey, 2025). Taiwan and India’s efficient production reduces waste, while domestic stockpiling cuts shipping emissions—aligning cost savings with green goals.
Could low-duty regions face reciprocal taxes? Imagine a hypothetical 5% tariff imposed on Taiwan and India imports as trade policies shift. Even then, total duties would hover at 5-7%, far below China’s 25% ceiling. For a $100,000 shipment, that’s $5,000-$7,000 versus $25,000—a 70%+ savings buffer. Procurement teams could still rely on these regions’ efficiency and quality, with domestic stockpiling further softening the impact. Flexibility keeps this a winning strategy.
Enter AmTech OEM, a 30-year veteran in precision manufacturing. We source from Taiwan and India to deliver ISO-certified components—machined castings, forgings, shafts, gears, and prototypes—minimizing tariff costs. Our New Jersey hub stocks these parts, ensuring timely delivery and savings. Whether you’re in automotive, oil & gas exploration, or medical, we turn tariff challenges into opportunities. Contact us to optimize your supply chain—together.
