Similarly HYTE, mostly known for their PC cases, gives a remarkably detailed insight, both into their cost structure and how they are impacted by tariffs, in this video:
I of course feel for them as a small business. They took risk and did the numbers and are trying to bring something great to their customers.
One angle I didn’t see covered in response… dropping the quality on the product. If America just isn’t there yet on manufacturing, and people still only want to pay $139 for a computer case… surely someone in America can sell the customer a box of some sort for $139. It might be pretty crap, but there’s already local industry selling trailers and park benches and other things made out of metal. A barebones steel case seems within reach for $139, and they can improve from there.
The more I read opinions like these, the more it becomes clear to me that people have no clue how markets or consumerism works. Questions are never considered. Like:
Where are the raw materials for those local trailers and park benches coming from?
What is the impact if some of the raw material used for local trailers and park benches are diverted towards making $139 low quality computer cases?
Most importantly that even though "someone in America can sell the customer a box of some sort for $139", is there a market where people want to buy these low quality boxes?
The answer is that the time for sub par quality products is coming. Just not American made. If companies cannot import a decent quality box to sell for $139 and instead need to get a "barebones case" costing $70 and then mark it up to $139 to cover for tariffs -- that is what is going to happen. And given that lot of consumer protections like EPA, CFPB, FDA etc are being gutted - there is no going back if the box breaks down within the warranty period and you need or refund. Or worse yet, it contains lead or other harmful chemicals and it is going to be costly to remove those chemicals.
Because computer cases necessarily have a bunch of moderate-precision spacing for mounting hardware that are almost always stamped directly into the aluminum chassis. If the mounting isn't right, it ceases to be useful as a computer case.
Only works for low-tech stuff. You simply can't make a mainboard out of plywood. And why exactly would you want low-tech manufacturing jobs producing crappy knock-off products in the US? This really does not look like a good strategy.
This. I can't understand why people don't see it. Of course we can't rebuild what China does overnight. But we can create new supply chains at a lower quality point and then climb back to our original level. I've seen it happening all over the world.
I never believed that Trump's main goal is to bring everything back to the US. Instead, the government wants a new blend of suppliers that leans more heavily on the US but diversifies inputs to many countries.
This is a worthwhile goal even if China was an US ally. We don't want all eggs in one basket.
Building up from lower quality to higher quality works when you have cheap labour force due to cheap cost of living and lower regulation so you can take at least some liberties.
USA has neither, apart from maybe slave labour pool they have collected. So they would also need to compete in global markets with those countries also trying to climb up.
This is a fantastically detailed video. Thank you for sharing this! Everybody on HN should watch this video to get an inside view of what businesses are going through in America right now.
I'm guessing a ton of new companies will pop up overnight in India, Taiwan, Vietnam, S Korea that simply purchase components from China and resell them to the US. Not exactly helping anyone.
> guessing a ton of new companies will pop up overnight in India, Taiwan, Vietnam, S Korea that simply purchase components from China and resell them to the US
The reality in high-tariff economies is simpler: more people just forge customs paperwork.
This will happen in Cambodia. They are building a massive amount of factories near Sihanoukville where the Chinese goods will be stamped with « made in Cambodia » and shipped right away to the USA.
This is a known issue with tariffs, so "governments" are on the lookout for it. It's risky, and there are consequences if you get caught.
There were however reports of Chinese companies actually setting up production in e.g. Thailand. The products are more expensive then, so it doesn't actually change anything - at least it was like this before the introduction of the one billion gagillion tariffs.
> This is a known issue with tariffs, so "governments" are on the lookout for it.
not just an issue with tariffs, but with sanctions.
Guess how many companies suddenly popped up in places like kazakhstan importing electronic components and other us-sanctioned products, and then selling it to russia.
Apple is shifting its production to India, but in reality, the phones are just assembled in India. All the components are made in China, shipped to India, where they are put together. China still captures 90% of the value
I don't know the latest, but as of like 6-8 mo ago. India hasn't been able to produce much (anything?), despite having millions of dollars of Chinese equipment ready to be put into use.
India has been producing mobiles for local consumption for few years now. Sure, almost everything was imported initially. But, recently govt is targeting PLI for specific mobile components like PCB, screen, camera modules, enclosures etc. CPU/SOC still has to be imported though. 10% of apple iphones are already manufactured in India.
The interesting thing is that India already has high tariffs for goods coming from China, however this might be different for finished vs non-finished goods and for consumption vs re-export goods. The tariffs aren't cheap though. Iphones not manufactured in India and sold there are significantly more expensive due to all the tariffs.
Yeah and it has no effect because its done by companies not countries. This is gonna continue for a long time. Its an incredible time to be a middle man
I thought a majority of Chinese businesses are state owned. Their neighbors understand the stakes though and have demonstrated eagerness to have low US tariff rates. I assume their customs agencies will be on the lookout for this relabeling strategy.
It's going to occur, as it already does occur, for all kinds of reasons, but it's not going to be as simple as you make it out to be. There is a limited capacity to perform this work meaning the costs may not even be competitive with the US tariff in the long run.
> I thought a majority of Chinese businesses are state owned.
Where'd you get that? The state has a significant (though usually less than controlling) ownership stake in about 1.5% of Chinese businesses, and at least _some_ ownership in about 2%.
"The state owns some of this" is, of course, not equivalent to "the state meaningfully controls this".
But in any case for this sort of activity you'd probably just establish new companies, which the state wouldn't have any share in anyway. And, also, this is kinda academic, because you wouldn't be doing it in China, you'd be doing it in some third country and transhipping goods originating in China.
I have never been to China, but you sound informed on the topic - maybe you can weight in on that.
I've heard from various YouTube channels covering news about China, it's social issues and shenanigans that all companies above a certain size are required to have someone on staff that's essentially part of the government. These channels are however mostly run by people speaking very good English, so clearly made for the western market.
But Googling that information seems to confirm it, too. I.e.
> Since 2018, domestically-listed companies are required to establish a party entity.
I cannot speak with confidence on the topic, but from an uninformed spectators perspective, it does sound like timewizards argument was correct?
> I thought a majority of Chinese businesses are state owned.
That’s not how things work, they care about control not micromanaging everything. There are rules favoring majority Chinese owned companies, but that doesn’t need to be government ownership.
The CCP only really cares about large companies or specific industries like media. There’s minimal interference in a food truck and thus most companies that are small, but things get more involved as you scale. Critical industries like shipping and electricity have government owned businesses running things.
Long term it will work. If foreign govt allow getting around tariffs, according to trump import deficit formula, tariff on the govt will go up. Usgov could also increase tariff on countries with more companies doing tariff shenanigans. The problem is with american 2 year election/midterm cycle no one believes that this will last more then 3-6 months now.
With the exception of command economies (basically just North Korea, these days), this sort of thing would generally be done by companies, not countries.
Straightforward circumvention like that isn’t allowed (I’m not saying it won’t work). The new companies you mention would only be entitled to thelower tariffs on the value they add to the product they buy from China.
But how much visibility can the US government have into what happens between India and China? Especially if they work at hiding this stuff. I'm not saying it will work, I'm just curious. How can you tell how much of a product is made in India vs China if India and China work together to lie to you about it?
Regarding India, Indian govt already has huge tariffs and non tariff barriers on China. They imposed many of those during Galwan valley standoff and later extended them when they are promoting manufacturing or PLI for specific sectors. Indian govt and local Indian manufacturers won't allow middlemen to come and relabel items and eat in to their share of the pie. Sure, with the corrupted Indian bureaucracy some relabling will still go through, but it wont be much. Not sure how US plans to deal with relabling in Cambodia, Mexico etc. though.
This already happened under Trump I administration. Now they are setting high tariffs on India, Vietnam, as well. Not sure whether it is to close this loophole or not.
Ryan Pertersen (Import Genius and now Flexport) said that if these tariffs continue on China, 80% of small and medium-sized businesses that buy from China will go bankrupt. Over 2 million jobs will be lost. He is not the only one calling for a small business Armageddon. The big corporations love it, companies like Apple got exemptions, it's why you don't here them freaking out.
Hope Wyze makes it through this, long-time customer, and their cameras are great.
Big corps love it because they're at the top of the food chain. But an extinction event is an extinction event. It just takes longer for the effects to work their way up.
Small businesses are 44% of US GDP. Losing even 10% of GDP would be very uncomfortable.
In 2021, approx 500 years ago, Ryan tweeted out a series of measures intended to resolve a Long Beach port shipping jam. His measures did almost nothing and amounted to bluster and broscience. https://www.latimes.com/business/technology/story/2021-10-28...
A person was wrong once, so can be safely ignored forevermore. Shipping lane jams nor military airspace have nothing to do with the matter of tariffs GP is talking about.
And the Death-Cult of Emperor Trump will cheer it every step of the way until they finally realize (entirely too late) that they're gettin' screwed too.
If you start building a factory in the US now, it will take years and you’ll be paying high tariffs on the equipment, high tariffs on the raw materials, high wages for unexperienced workers… And all of this in a political environment so unstable that your investment might be pointless six months from now if/when the president flip-flops again.
I doubt they own any part of their manufacturing at the moment.
Unless manufacturing already exists in the US (which I doubt here), I don't believe company this size has any chance to move manufacturing to the US
Adafruit (an electronics manufacturer and retailer here in the United States) has been sharing insights in a video series called 'Tariff talk' as well: https://youtu.be/y36XchXA8BU
If they had bought American floodlights they had saved 255k in tarrifs. So if they had paid 200k for the floodlights they would have still been better of.
One could argue, that there might be no American Floodlight Company - well here is the incentive to build one.
Secondly the money isn't lost, it goes to the state. Like a tax, but it is called differently. With this 255k more the state can now subsidise the local floodlight industry.
If anything of the above comes to fruition... That's a different matter...
That is not even remotely correct. The American Floodlight Company would sell the floodlights for slightly below the 392k - the total amount these guys paid. Something like 350k and tell the consumers they just saved "42k". Because the alternative is? Import it and pay huge tariffs. This is what happened last time with washing machines.
The protectionism also means American Floodlight Company no longer needs to innovate. Because they can keep producing the same lights over and over again. What are people going to do? Look for innovative floodlights overseas and pay huge tariffs?
It also means American Floodlight Company products cannot be exported. It is costlier and not innovative. Japanese, Chinese, Koreans brands are going to leave them behind.
In the meantime, American Floodlight Company is a business, not a charity. They will find loopholes like get cheap parts -- this will be easier as world moves on to newer, more efficient lights, so that overall input costs are low - despite the tariffs. Then assemble it in US and claim it to be "Made in USA".
Win, Win for the company while the consumers can take a hike.
Yes that's the most likely outcome, but OP asked for the benefits - and I guess my explanation is the naïve thinking that lead to the tarrifs in the first place
Floodlight companies don't appear overnight. I suspect they won't appear at all, given the instability of the tariffs and the fact that the next President (or even the current one) could wipe them off, rendering their shiny new Floodlight factory completely useless overnight. This extends to any industry.
Tariffs need to be stable and updated with several months of advance notice - otherwise they don't serve their purpose.
Thanks to the chicken tax we already know how this will develop: The US floodlight company will sell those US-made lights these lights for ~400k (so at the margin of market price plus tariffs), and no one outside the US will want to buy them. This is literally what already happened with the US car industry.
There are many companies all over the world focused on local markets. The car industry is strategic, but I wouldn't mind buying a floodlight from a company that doesn't export anything.
Like "they" came for middle-class Americans in stable US government jobs?
If they cared about re-creating a middle class with jobs, they wouldn't have started with wantonly eliminating so many of them using a method similar to checking if the packaged spaghetti is cooked. Toss it randomly at the wall and see what sticks.
These tariffs are probably the worst way to try to do that. America had its best “middle class” when companies and CEOs were heavily taxed and when unions were thriving. The politicians ranting about “bringing jobs back to America” are the same ones that dismantled the things that actually _made America great_, and if they actually cared about the quality of living for most Americans they would do actual work to get there instead of alienating our economy to benefit themselves and their rich friends.
There is no unemployment problem. Producing floodlight is not high paying job. If things become more expensive, more people will fall out of the middle class because they will no longer be able to afford what they previously could.
There is an enormous problem with sub-employment. Scores of Americans "employed" in activities such as Uber/Lyft driving, food delivery and quasi-prostitution (OnlyFans and adjacent).
Floodlight making would be a huge step up for Americans leaving small towns for terrible jobs in big cities.
Check the problem with drug addiction in small and medium cities.
> Secondly the money isn't lost, it goes to the state. Like a tax, but it is called differently. With this 255k more the state can now subsidise the local floodlight industry.
Alternatively the taxes can be lowered so that overall the American consumers don't lose buying power (imports get more expensive but people also have more money to spend).
> Secondly the money isn't lost, it goes to the state. Like a tax, but it is called differently. With this 255k more the state can now subsidise the local floodlight industry.
Is that what is planned? The US has a lot of dept internationally I assumed the additional money goes into paying that back, or at least stabilize the dollar somehow
During the last Trump trade war with China, there was about $28B paid out to American farmers as “Market Facilitation Payments”. So basically the taxes collected from our own tariffs went to subsidizing the impact of retaliatory tariffs. The whole thing is pretty dumb.
But I meant that if you take an example of tshirt production that gets sold in the US, with fabric that comes from Bangladesh, one producer in Vietnam, one in the US. The final price consists of materials, labor, shipping. Both effectively have materials and shipping tariffed and for the Vietnam company additionally the labor is tariffed.
So the only difference is the application of the tariff on the labor for the Vietnam company.
Lutnick: "It's time to train people not to do the jobs of the past, but to do the great jobs of the future. This is the new model where you work in these kinds of plants for the rest of your life and your kids work here and your grandkids work here. We let the auto plants go overseas."
United States Secretary of Commerce ladies and gentlemen!
It harms 100% of Americans which means it harms the 50% of Americans who advocate for science, education, and health. Anything that causes any harm to this group in any way at any cost is what that other 50% wants and derives the benefit from.
American products are too expensive, so nobody buys them. Import taxes make imported products more expensive so that they are even more expensive than the American products. The hope is that this makes it cheaper for American consumers to buy American products than to buy imported products.
But the elephant in the room is that the American-made products are now so expensive that you cannot profitably export them to any other country. So you have effectively limited the market size to purely the internal American market. And that means Chinese companies might have much better economies of scale. Because they can capture customers worldwide and not just inside America.
But most likely, the house of cards will fall over before you ever ship the first American-made product: Headlights need injection-molded parts. Since this was historically almost fully outsourced, the U.S. has almost no production capacity in this area. Building these factories takes 2 to 5 years. That means, unless everyone is fully convinced that these taxes will stay in effect for at least 5 years, nobody is going to build the necessary manufacturing capacity. And good luck finding US investors who are happy to invest millions into a factory with a predicted 5% profit margin.
It offsets the cost of cheaper Chinese labor and material costs. With the goal of making "made in the USA" products price competitive where they were not before.
In the abstract this possibly makes more jobs in the USA for manufacturing these items. It also keeps the entire process conducted in US Dollars that stay entirely within our borders which is theoretically better for currency stability and value.
Of course it what you describe is a lasting situation, no one outside of the US would buy from an industry that is only propped up by subsidies, whose product is available for cheaper elsewhere, and likely subject to counter-tariffs. From there, the USD-labelled trade outside of the US would decrease, which makes it a less interesting proposition for foreign companies to hold USD, and, by extension, T-bonds.
US companies that actually made viable products for the international market would now have to compete with artificially subsidized companies on their costs, risk getting caught in tariffs, and, unless they build a critical product, probably see their international sales decline.
Negatively polarize the Democratic Party out of their anti-trade posturing (sweatshops! outsourcing pollution! look at the rust belt!) for a generation?
Both Bill Clinton and George W. Bush were huge free traders, and Barack Obama largely carried on that bi-partisan tradition.
But the resurgent left of the Democratic Party, inspired by the anti-WTO “Battle of Seattle” and led by folks like Elizabeth Warren, made free trade toxic to enough of the party that Hillary Clinton in 2016 felt she needed to come out against Obama’s Trans-Pacific Partnership which she herself had taken a lead in negotiating.
Trump ostensibly killed it, but it was already dead. Even an incredibly beneficial trade agreement—both economically and strategically—had no constituency of consequence on Capitol Hill. With Trump’s “help” maybe one will reemerge.
The TTP was structured as the economic equivalent of the Island Chain containment. It's conception lead to Made in China 2025 which wasn't rolled back just because USA withdrew from TPP.
Obama had the right idea, Trump if he understood it (lol) would have used it to screw China instead of giving China a free pass by withdrawing from it.
Note that China <-> US relations soured under Obama, well before Trump came into the picture and most of it was a direct result of TPP and policies like it designed to contain China economically.
From a "humorous absurdity" point of view, I kind of love this comment. It has just the right amount of pettiness and vindictive sentiment -- with just a hint of "tone-deaf". Bravo!
For the non Americans, it appears Wyze is a smart home company currently specialising in cameras, founded by ex Amazon (retailer) employees. I assume these floodlights are "smart" in some way.
How much in retail value? I've seen a few small companies that have all their manufacturing operations in China pass on tariffs at cost transparently, and for those that have already adjusted to the current rates, the surcharge is much smaller than I expected (~30%), but I don't know how margins differ by sector.
It does depend on industry, but I don’t think you should be too surprised by a 30% surcharge, and I have some math to illustrate!
Let’s assume that this 30% surcharge exactly matches the increased cost due to tariffs (I think 145%?). This would mean that 1.45*manufacturing_cost = 0.3*MSRP -> manufacturing_cost = 0.2*MSRP. The manufacturing cost is 20% of the end price. A higher surcharge would indicate that the manufacturing cost is a _higher_ percentage of the end price. Consider that they’ll also have costs due to shipping, returns, staffing, marketing, R&D, and they need profit on top. In that context, 20% seems quite reasonable to me.
Edit: you should expect to feel the highest percentage price increase in products that have become extremely commoditized, because they naturally have the tightest margins. Off the top of my head, I’m thinking toasters, microwaves, lamps, TVs, electronics cables, batteries, things like that
The top voted comments I see are all supportive so far.
There are a lot of comments asking why they don’t move manufacturing to Seattle. This theme is common among people who don’t understand how manufacturing works right now: They don’t realize that a product like this has many different parts from different places, down to the dozens of little SMT capacitors. You can’t just move the factory and avoid tariffs because the parts still come from other places.
I don't think there's enough manufacturing capacity in Seattle to absorb this. There are plenty of CMs here but they're small and midsized, not the big boys. And they're not in the habit of running mostly empty.
And they’re not the sort of places where you get boards for consumer electronics made. They’re doing microwave/high frequency boards for companies like Boeing.
They'll absolutely do consumer product assembly. It's short-run versus mass-production that's the real problem, most of them just aren't set up for high volume.
Board fab though, not so much. I don't think we have a PCB fab left in the area after losing Prototron. I'd be more sad about that, except that I don't think I ever had a single order with Prototron that actually went smoothly and came back correctly.
> This theme is common among people who don’t understand how manufacturing works right now: They don’t realize that a product like this has many different parts from different places, down to the dozens of little SMT capacitors. You can’t just move the factory and avoid tariffs because the parts still come from other places.
This argument doesn't make a lot of sense.
Suppose your company only does final assembly. Then whatever the value add of final assembly is, that's how much of the tariffs you can avoid by moving your own factory. You can eliminate as much as comes from your own contribution to the cost of the product. Meanwhile the company that makes the capacitors can avoid the tariffs on their value add by moving the factory that makes the capacitors. The fact that these are two separate companies doesn't really change much. Each one can move the part that they do.
In fact, it actually helps. Suppose the capacitor company can't move for some reason, but the final assembly can. Well, then at least you can avoid the tariffs on final assembly instead of neither if they were both made by some conglomerate that refused to move either one. Not only that, suppose other companies make the capacitors in Japan as well as China, and then the company can do the final assembly in the US and avoid the tariffs on capacitors from China by buying the ones from Japan.
So moving one factory helps reduce the impact of tariffs on the final product from 145% to 135%, and to reduce it to zero you would have to move hundreds of factories, with tiny gains at each step.
I think the original argument makes a lot of sense, and yours does not. "Just move two hundred factories on a different continent" might as well be "just invent a time machine".
> So moving one factory helps reduce the impact of tariffs on the final product from 145% to 135%, and to reduce it to zero you would have to move hundreds of factories, with tiny gains at each step.
This is ignoring two things. First, for the earlier components in the supply chain, it isn't a reduction from 145% to 135%. It's a reduction to 0%, because the inputs are fungible commodity raw materials made in dozens of different countries, so moving the factory removes the entire tariff for the company selling that input to some other company. Which is what the manufacturer (i.e. the component seller) cares about, and they're the one who would be moving the factory.
And second, the later stages of the supply chain tend to contribute the most value. Suppose you haven't moved the factory that makes the capacitors, but you move the factory that makes the phones. The phone costs $500 retail, how much of the contribution was the wholesale price of the capacitors? A dollar? 145% of <1% is tiny.
So you both have a large incentive to move the early stages, because the tariff you avoid is on ~100% of the selling price from the perspective of the company making it, and a large incentive to move the later stages, because the later stages are the largest share of the final price.
> "Just move two hundred factories on a different continent" might as well be "just invent a time machine".
Why is moving 200 factories harder than moving one factory, when there are also 200 companies and they each only have to move one factory?
> can’t just move the factory and avoid tariffs because the parts still come from other places
Trump has already started blinking on the China tariffs. It would be madness to move operations in the midst of this chaos—you’d immediately be undercut by cheaper competition.
He’s already said they will reduce the tariffs on China. He insisted there will be some tariffs but 145% is too high and it will come down.
A company moving their production anywhere based on what the policy is right now would be foolish because the policy could change in the next 5 mins, but will almost certainly change within minutes if there are empty shelves.
Are you suggesting moving operations to the US with this comment? It's the US adding all the uncertainty and instability to this environment. Having your operation based in the US makes this worse. You still have tariffs being applied to most of the components you need to assemble your product. You're now subject to more laws and rules changing overnight without the ability to plan ahead for them. If you're a company selling this product worldwide, you now have 100% of your operations subject to uncertainty vs. say 30% that was destined for the US market to begin with.
This is why you won't hear many reports of companies paying these huge tariffs. Wyze is big enough to eat the high costs on some of their imports. Most companies will redirect their shipments to Europe and Africa and pause sales in the US until the situation becomes more stable.
In another reply Wyze said they too paused most of their shipments but decided to eat the cost of this one because it was for a commitment to a retailer.
Oh, yeah, that is _very_ much how the markets are treating it. The idea that these tariffs might be _permanent_, is very much not priced in, at least not for the moment.
Even if they are permanent it'll be smarter for many companies to move manufacturing out of the US rather than in. If they're permanent the retaliatory tariffs other countries instituted in response to US tariffs mean that it'll be cheaper to build outside the US if selling outside the US. And the market of "not the US" is much bigger than the US market, so investing in the not-US market is more likely to lead to growth than investing in the US market.
This has been the most annoyingly infuriating part of the manufacturing conversation.
People simply don't understand the scale and complexity of modern supply chains. By one estimate, it will take $40T to move all of China's existing manufacturing capacity and supply chains to the US, and it will take 20+ years if you're really motivated.
People still think that order goes in and a factory makes the finished goods. In reality, individual parts can move across borders dozens of times before they're ready to be placed into a bigger product.
Heck, I remember reading that Ford cars built in Canada cross the Canada-US border 11 times before they're finished
> By one estimate, it will take $40T to move all of China's existing manufacturing capacity and supply chains to the US, and it will take 20+ years if you're really motivated.
Which also simply cannot happen because even if the US don't want stuff manufactured in "China", the rest of the world does. So the US, with higher local costs, cannot reclaim the economy of scale that went into the current chinese supply chain. Seems to me, at best the US can split it: a high cost chain in the US, a low cost chain in the rest of the world. What the US MIGHT achieve (on a long time frame) is move most of the chinese part to other low cost countries. That was already well under way.
The US also don't have the available population to run these factories.
Who needs enemies - when a country is made unhealthy (due to all the new regressive HHS directives), manufacturing anything is costly, importing is unfeasible due to tariffs, misinformation, deporting anyone without due process and on and on?
Tarrifs have started to hit the boardgame industry pretty hard already, and as an enthusiast, I have started to really worry. Within a very short span, several companies have already announced drastic slowdowns in product production/shipments and staff, to some outright closing.
So I manufacture cycling products from Taiwan + China, importing to US... he's paying 152% tariffs, on the cost price of the product. Previously would have been like 7% base, with maybe a 20% trade war tarriff added on.
So for back of napkin: $10 widget, selling for eg $40.
This has been written about in so many articles and discussed so extensively on HN and many other forums over the last month that it's hard to believe your stated lack of knowledge.
Higher, most goods don't have import taxes, or rates were less than 10 percent. Looks like the rates for wall mounted lights were previously 5 percent.
And even if the factory where they're assembled is in the US, they still need to import the materials/components from...most likely not the US; that's why CyberPower is looking awfully grim atm, assembly in the states, but they won't be able to make the cost of the materials remotely worth it for that reason.
https://www.youtube.com/watch?v=1W_mSOS1Qts&t=1394s
They also address the question of moving their production to the US.
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