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Ace Computers CEO John Samborski on the Effect of Tariffs on Small Technology Companies

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Ace Computers CEO John Samborski is taking a leadership position on the issue of how small to mid-size technology companies are affected by tariffs. The bottom line is that these companies are being disproportionally hurt by the recent and upcoming tariffs on computer components.

The current 10% tariff in effect and eventually the 25% tariff apply only to components utilized in personal computer production and not to finished goods. The end result is that relatively small technology manufacturers, such as Ace Computers, will pay 10% to 25% tariffs on components imported from China; while Fortune 100 Companies that assemble the majority of their products in China will pay zero tariffs. Finished desktop PCs, notebook PCs, tablets, servers and phones fully built in China and built with identical China-made components will not be subject to these tariffs.

“Since our customer base has pricing locked in with U.S. government contracts, we are not permitted to raise prices for months at a time,” John says. “This means Ace Computers and other companies like ours may actually be losing money on orders.” He continues, “The obvious solution to the problem is to reverse the tariff schedule to allow the components to enter the country tariff-free while adding the tariff to cover only fully built products coming in from China. That will encourage the large businesses to repatriate their production facilities and build computers in the U.S. once again--leveling the playing field for those who build computer products in the U.S.”

We are a woman-owned small business and one of the largest fully U.S.-based PC manufacturers. Headquartered in Greater Chicago since 1983, we employ almost 50 people across the U.S. with an average tenure of over 10 years.

In 1983, there were many U.S.-based firms providing parts such as PC motherboards, video cards, etc., but as pricing pressure became tighter, production started moving first to Taiwan where the production costs are lower and eventually to China. Today most of the world’s PC components are manufactured in China.


 

 

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