Recent tariff announcements — spanning country-specific measures to copper foil and semiconductors — are reshaping markets and impacting the electronics industry. Global Electronics Association leaders share perspectives from their regions on what these changes mean.

Europe: 
Sanjay Huprikar, Chief Global Officer

In late July, the United States and the European Union struck a wide-ranging trade deal, which imposed a 15% import tariff on most EU goods. While very few Europeans are enthusiastic about the agreement, the general sentiment from most politicians and business leaders is that evading an all-out transatlantic trade war and achieving predictability and stability in the trade relationship was important in continuing a long-term dialogue on eventually dismantling barriers.

Mexico: 
Lorena Villanueva, Director

Sentiment across the electronics and related industries is tense, with companies bracing for cost pressures and supply-chain disruptions from new U.S. tariffs on copper, semiconductors, and non-USMCA goods. President Claudia Sheinbaum and Economy Minister Marcelo Ebrard have adopted a steady and strategic posture—calling the measures “unfair,” emphasizing Mexico’s right to retaliatory actions, and pursuing negotiations for exemptions and a broader “global agreement” on trade, security, and migration. In the short term, executives expect inflation, export disruptions, and slower investment—possibly triggering a recession—with Moody’s warning that tariffs of this magnitude could sharply reduce GDP growth. 

From my recent tours and alliance meetings in Guanajuato, Querétaro, Chihuahua, and Jalisco, members are voicing both resilience and concern: large OEMs are accelerating supplier diversification, while smaller manufacturers—especially in wire harness, PCB assembly, and metal-mechanic segments—fear margin erosion from tariffs and a strong peso. Many are seeking timely guidance from the Global Electronics Association to adapt production lines and protect export competitiveness over the next 6–12 months.

The coming days—especially after planned bilateral meetings and announcements—will be critical in shaping both sentiment and strategic responses.

United States: 
Joe Schneider, Vice President, U.S. & Canada

In the short term, companies face immediate cost pressures, supply chain instability, and interruptions in customer demand, with steel tariffs impacting customers’ equipment sales and, in turn, reducing demand for manufactured electronic products. Long-term expectations include continued volatility, potential forced redesigns to avoid constrained supply chains, and shifts in investment. Tariffs have created operational inefficiencies, prompting customers to adjust order timing to avoid overstocking, a lesson from pandemic-era inventory surpluses. Significant tariffs introduced with short notice could drive overbuying, further tightening component availability and forcing redesigns or alternate sourcing, both of which increase costs.

Strategically, companies are carrying more finished goods in collaboration with customers, exploring AI tools to anticipate supply chain changes and inform risk orders, and limiting hiring due to customer uncertainty while maintaining strong ties with temp agencies for flexibility. Currently, investments are made only when critical to current or prospective customers.

Learn more: Copper Tariffs and the Hidden Costs to U.S. Electronics Manufacturing

China: 
Sydney Xiao, President, East Asia

Sino–US trade falls 20.8% in Q2; Tech exports face tariff pressure.Customs data show that China’s trade with the United States moved from year-on-year growth in Q1 2025 to a 20.8% decline in Q2. Electronic and high-tech products were among the hardest hit, following recent U.S. tariff increases on semiconductors and copper foil. While companies may face short-term order and profit pressures, the situation could also encourage technology upgrades and supply-chain diversification over time.

To learn more about global electronics trade, read our trade flow study, Interconnected: Global Electronics Trade in an Age of Disruption

by Diana Radovan, Director, Sustainability Policy

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.

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