by Diana Radovan, Director, Sustainability Policy

Key Summary

• On 1 August 2025, the European Commission opened a public consultation on the Circular Economy Act, with feedback accepted until 6 November 2025.
• The Act is a core part of the Clean Industrial Deal and targets circularity in electronic and electrical equipment across the Single Market.
• The consultation covers e waste challenges, circular business model barriers, and supply and demand for secondary raw materials.
• Proposals focus on tackling e waste and creating a true Single Market for secondary raw materials and waste.
• The Global Electronics Association will coordinate member input to help shape this major sustainability framework.

On 1 August 2025, the European Commission launched its long-anticipated public consultation and call-for-evidence for the upcoming Circular Economy Act (CEA), expected in Q4 2026. The consultation remains open until 6 November 2025, providing industry stakeholders ample time to contribute. The CEA is a central pillar of the EU’s Clean Industrial Deal and is co-led by DG Environment (B3 – From Waste to Resources) and DG GROW (I4 – Sustainable Products). It focuses on strengthening the circular economy within the European Single Market, particularly in the area of electronic and electrical equipment (e-waste).

What’s in the Consultation?

The questionnaire includes around 30 questions across key themes:

• General perspectives on the circular economy

• Challenges and opportunities for e-waste

• Barriers to circular business models in the Single Market

• Supply and demand for secondary raw materials

• Improving waste management and circular processes

This is a critical opportunity to shape a legislative framework that supports innovation, investment certainty, and cross-border compliance for circular business practices.

Why It Matters

The circular economy is seen by EU policymakers as essential to economic security, competitiveness, resilience, and decarbonisation. Despite existing legislation (e.g. Waste Framework Directive, Ecodesign Regulation, and Packaging Waste Regulation), progress toward circularity has been limited. The Commission is seeking to address this by removing market barriers and enhancing supply and demand for high-quality, affordable secondary raw materials, including critical raw materials.

The CEA builds on recent political momentum—including the Antwerp Declaration, Budapest Declaration, and reports by Letta and Draghi—as well as priorities outlined in the 2024–2029 Political Guidelines, Competitiveness Compass, and the Clean Industrial Deal.

What’s Being Proposed?

The CEA will focus on two key intervention areas:

• Tackling e-waste, the fastest-growing waste stream in the EU, with less than 40% currently recycled. The initiative may involve updating existing legislation to improve collection, recycling, and market uptake of secondary raw materials.

• Creating a true Single Market for secondary raw materials and waste, through:

  • Reforming end-of-waste criteria

  • Simplifying and digitalising extended producer responsibility (EPR) schemes

  • Introducing targeted criteria for public procurement to stimulate demand for circular goods and services.

Both legislative and non-legislative measures are on the table, with a focus on reducing administrative burdens and improving economic viability for circular systems.

GEA Members: Help Shape the CEA

This is your chance to contribute to one of the EU’s most significant upcoming sustainability frameworks. The Global Electronics Association will be coordinating feedback on behalf of members. To have your say, contact Diana Radovan, Global Electronics Association Director of Sustainability Policy, at DianaRadovan@electronics.org.

Key Summary

• The August 2025 issue highlights weakening U.S. economic momentum and tariff-driven inflation pressures.
• North American PCB and EMS shipments declined, but book-to-bill ratios remain strong, signaling ongoing demand.
• Global sentiment improved modestly, with better expectations for shipments, orders, and capacity utilization.
• New intelligence briefs focus on copper tariff impacts, AI policy, EMS software gaps, and global production patterns.
• Upcoming events include EMS roundtables and European market presentations across Switzerland, Sweden, Poland, and France.

Welcome to Industry Intelligence Insights, your monthly guide to the trends and data shaping the global electronics manufacturing landscape. I’m Thiago Guimarães, Director of Industry Intelligence at the Global Electronics Association, and I’m pleased to share the latest updates.

This month’s issue arrives at a time of growing uncertainty across the global economy. Our Chief Economist, Dr. Shawn DuBravac, examines a weakening U.S. outlook, where tariffs and trade are the focus.

Against this backdrop, we share new data on North American PCB and EMS markets, which show softening shipments but resilient demand. We also spotlight July’s global sentiment report, our latest intelligence brief on the rising costs of copper tariffs, and expert analysis on U.S. AI policy, EMS software gaps, and the hidden geography of electronics production.

Read on for timely intelligence to help you navigate what’s ahead.

Thiago Guimarães 
Director of Industry Intelligence, Global Electronics Association

Market Analysis from Global Electronics Chief Economist Shawn DuBravac

Yes, U.S. economic growth remains technically positive, but momentum is clearly fading. While the economy remains in expansion, the vigor that defined 2024 has ebbed. Real GDP contracted at a 0.5% annualized rate in Q1 2025 before rebounding to 3% in Q2. A rush to import goods ahead of new tariffs dampened growth in Q1 and temporarily inflated it in Q2. Volatility in trade flows is masking underlying economic weakness. Averaged across both quarters, GDP grew just over 1% in the first half of 2025, a sharp drop from nearly 3% in 2024. Final sales to private domestic purchasers, a key measure of underlying demand watched by the Fed, slowed to 1.2% from 1.9% in the prior quarter, marking the weakest pace since Q4 2022.

In 2025, real personal consumption expenditures (PCE) have shown clear signs of weakening. After growing just 0.5% (annualized) in Q1, real PCE rebounded modestly to 1.4% in Q2, indicating soft consumer momentum. Much of this growth has been concentrated in services, while goods spending has stagnated or declined. On a monthly basis, real PCE was nearly flat in both May and June, with a 0.1% rise in June barely reversing May’s drop. Overall, consumer demand has slowed notably compared to 2024, reflecting the combined weight of inflation, higher borrowing costs, and tariff-driven price increases.

Inflation is beginning to reflect the tariff shock. Core PCE rose to 2.8% year-over-year in June, marking the third consecutive monthly increase. Most of the upward pressure came from goods categories either directly subject to tariffs or affected indirectly through global supply chains. According to Yale’s Budget Lab, the average U.S. statutory tariff rate is set to reach 18.2%, its highest level since the 1930s, once the August 7 tranche is implemented. Historically, inflationary pass-through tends to peak 6 to 9 months after duties are enacted. If that pattern holds, the most significant inflationary drag will land during the critical holiday season, just as households face tighter budgets.

Job growth is also slowing and becoming increasingly concentrated. The July payroll report showed a gain of just 73,000 jobs, the weakest since the pandemic recovery, while the unemployment rate ticked up to 4.2%. Over the past three months, average monthly job gains have slumped to just 35,000. Hiring remains strong in health care and government, but manufacturing, transportation, and other cyclical sectors are now shedding jobs. While layoffs remain low, employers appear to be pausing hiring, a classic late-cycle signal.

The Federal Reserve is in a bind. The Fed has held its policy rate between 4.25% and 4.50%, caught between persistent inflation and weakening labor market data. Policymakers insist cuts are unlikely until there is clear evidence of slack, rising unemployment, and outright job losses. With core PCE at 2.8% and tariff pressures building, the room for easing is limited. Markets are currently pricing in a 75% to 80% chance of a rate cut by September following the soft jobs report, but Fed officials such as San Francisco’s Mary Daly have warned against acting prematurely, arguing that early cuts risk re-anchoring inflation expectations.

There is a narrow Path to avoid contraction. The U.S. economy is teetering on a knife’s edge as it approaches 2026. Avoiding contraction remains possible but will require a precisely calibrated policy response. First, inflation must cool decisively. That means containing tariff pass-through and bringing core PCE below 2.5%, enabling the Fed to cut rates without jeopardizing credibility. If unemployment moves sharply higher, the Fed may have scope to cut more aggressively. This policy mix could sustain soft-landing conditions, but it demands timing, coordination, and a delicate balance.

The risk of a hard landing is intensifying. A scenario in which tariffs escalate further could provoke retaliatory trade barriers, disrupting exports and global supply chains. Inflation would remain sticky, particularly as input costs rise across imported goods, constraining the Fed’s ability to respond even as growth falters. In this setting, stagflation becomes the most acute macroeconomic threat, a combination of elevated inflation, rising unemployment, and declining output.

Bottom line, the U.S. economy faces a narrowing window to engineer a soft landing. The illusion of Q2 strength is already fading, replaced by mounting evidence of stagnation. Without a meaningful reversal in trade policy or timely fiscal support, the baseline scenario is shifting from a slowdown toward a mild recession by early 2026.

Book to Bill

PCB: North American PCB Industry Sales Down 8.6 Percent in June

North American PCB shipments fell 8.6% year-over-year in June, with month-over-month bookings also down slightly. Despite the dip, a book-to-bill ratio of 1.06 signals continued demand strength and confidence in future growth.

EMS: North American EMS Industry Shipments Down 9.3 Percent in May

North American EMS shipments fell 9.3% year-over-year in May, while bookings rose modestly compared to last year. A strong book-to-bill ratio of 1.43 reflects sustained demand and signals potential for shipment recovery in the coming months.

Global Sentiment

The Current Sentiment of the Global Electronics Manufacturing Supply Chain

July 2025 Global Sentiment: Despite persistent pressure from rising input costs, the outlook for shipments, orders, and capacity utilization improved over the month, indicating that while current conditions remain challenging, future industry expectations strengthened

Recent Reports

Market Intelligence Capabilities

The Global Electronics Association delivers data-driven insights that help decision-makers understand, anticipate, and shape the future of the electronics industry.

Industry Intelligence Brief: Copper Tariffs and the Hidden Costs to U.S. Electronics Manufacturing

This brief underscores significant supply chain risks and urges policymakers to exempt critical copper inputs to preserve U.S. competitiveness and support manufacturing resilience.

Blogs/Other Write Ups

U.S. AI Action Plan Should Revive Focus on the Electronics Inside by Chris Mitchell

The Global Electronics Association welcomed the Trump Administration’s National AI Action Plan, calling for renewed investment in domestic electronics manufacturing as a critical foundation for AI leadership.

Articles

The Hidden Geography of Electronics by Shawn DuBravac

Beneath the surface of debates about reshoring, tariffs, and supply chain resilience lies a deeper reality: Global electronics manufacturing is increasingly driven by the flow of inputs, not just the shipment of final goods.

What EMS Firms Want From Their Software—and What They Get by Thiago Guimaraes

Exploring the gap between EMS providers’ software expectations, centered on integrated production planning, quality control, and real-time data, and the actual capabilities delivered by many current solutions.

Upcoming Events:

• August 13, 2025 -- Texas/Dallas Area EMS Leadership Roundtable: Bot or Not? AI, Automation, and Assembling the Workforce of the Future
• August 29, 2025—Swiss Electronic Networking Day, Zurich, Switzerland: Global Electronics Association’s Christoph Solka will give a presentation on the European EMS market.
• September 4, 2025—Evertiq Expo, Gothenburg, Sweden: Global Electronics Association’s Christoph Solka will present on the European EMS market.
• September 11, 2025 — TEK Day Gdansk, Poland: Global Electronics Association’s Christoph Solka will be giving a presentation on the European EMS market.
• September 17/18, 2025 — IPC Day (EMS) Paris, France

By Chris Mitchell, Vice President, Global Government Relations

Key Summary

• The U.S. AI Action Plan highlights national AI goals but must place stronger emphasis on domestic electronics manufacturing.
• AI data center expansion depends on strengthening U.S. production of critical electronics like PCBs and advanced components.
• The Association urges inclusion of electronics manufacturers in federal robotics and drone supply chain reviews.
• Continued Defense Production Act investments are essential to scaling high-density PCB and packaging capacity.
• Expanding Registered Apprenticeships can help close workforce gaps in key electronics manufacturing roles.

President Donald Trump last week unveiled the National AI Action Plan and signed a trio of executive orders aimed at advancing U.S. leadership in the Global AI race. The Global Electronics Association applauds much of the plan and urges the Administration to prioritize the development of domestic electronics manufacturing capacity, which is a critical foundation for AI leadership. 

One of the executive orders aims to accelerate AI data center construction. Last October, the Global Electronics Association published a paper on the actions needed to ensure a resilient supply chain for the electronics used in AI data centers. The paper concluded that several electronics sub-sectors are “critically important” for AI and in need of significant government support to create a stronger supply chain. As further details emerge, we encourage more emphasis on the domestic electronics manufacturing ecosystem to support AI growth.

We also support the plan for the U.S. Department of Commerce to “convene industry and government stakeholders to identify supply chain challenges to American robotics and drone manufacturing.” Every single robot and drone system depends on secure and resilient supply chains for the electronics inside them. And yet numerous government and industry assessments have concluded that the United States lacks adequate capacity to produce cutting-edge printed circuit boards (PCBs) and related components. We urge the Administration to include our industry in these stakeholder groups to ensure electronics manufacturers have a voice in building secure supply chains.

Another positive step is the plan’s acknowledgment that the Defense Production Act (DPA) is crucial to “scaling foundational and translational manufacturing technologies.” The Global Electronics Association has long supported the use of DPA authority to scale specific technologies, and we encourage the Administration to continue DPA investments in domestic production of high-density PCBs to meet U.S. strategic national needs. 

Additionally, the plan says the United States should boost the workforce by expanding the use of Registered Apprenticeships in critical sectors. We agree. Since the Global Electronics Association’s Registered Apprenticeship Program was approved by the U.S. Department of Labor in 2023, we have supported the creation of nearly 100 new apprenticeships across nine companies; secured grant funding to offset employer costs; and published an Apprenticeship Playbook to make adopting such programs easier than ever. 

Rebuilding U.S. electronics manufacturing is essential to America’s autonomy and resilience in AI, and it will require sustained, strategic leadership. President Trump’s focus on revitalizing domestic manufacturing offers a strong platform for action. But without deliberate and ongoing investment, America’s capacity to produce the electronics that power its AI infrastructure, defense systems, and economy will erode—leaving the nation increasingly vulnerable to foreign suppliers and supply chain disruptions.