NEWSLETTER
As a result of the new rates that were announced last week, we have a series of unfortunate price and availability settings that we must do for US customers. We manufacture the majority of our products in Taiwan, for which we now face a new import rate of 32% in the US. We are absorbing part of this cost temporarily, and we are increasing prices in laptop computers in the existing one and the new early orders of the system by approximately 10% for US clients. For our lesser price configurations, where we cannot afford to absorb rates, we are currently stopping sales to the US. We are also delaying the launch of anticipated framework laptop 12 in the US in the US. UU. We continue to monitor the changes in the rates, and we will make additional adjustments if necessary. For non -American customers, there is currently no tariff impact, and we are maintaining the same prices and availability of our products.
First, I want to recognize that this stinks, for you, for us and for our mission to rebuild consumption electronics. We will overcome it. This is not the first challenge we have faced, and it will not be the last. We will navigate and remain focused on offering excellent products and complying with this mission. We will remain open and transparent at all times and try to contribute clarity to a messy situation where we can.
Next, let's enter more details about the specific changes we are doing. Our frame, Mainboards, desktop frame and a subset of our modules are carried out in Taiwan, which means that they are now affected by an import rate of 32% to the US. UU. Those are the products in which we increase the price by 10% in the US. Many of our modules are currently manufactured in China, where we face between 104% and 129% (!!!) rates. In those modules, we are also absorbing part of the rate and the increase in prices, depending on the category. Our Western digital storage is manufactured in Malaysia, which now faces a 24%rate. We have also increased storage prices by up to 10%, but I recommend that you buy it elsewhere for DIY edition if possible, as directly from the Western digital website.
These changes are now entering the US now for orders in the existence and for new advance orders. We are promulgating tariff absorption along with price increases as a temporary measure while we trace the situation evolving around tariffs. In the event, tariffs are eliminated, we will restore the early orders that have not yet been fulfilled at their previous prices. If tariffs persist or increase, they are likely to increase the prices of the United States even more. For the early orders of the USA. In case we need to adjust prices, we will request your confirmation of the new price before finishing your anticipated order. We have also temporarily eliminated the functionality to edit the EE. UU. As always, early orders are still completely reimbursed. We will keep it updated on the EE. UU.
For us, the orders of pieces and modules that send from our New Jersey warehouse, we have temporarily stopped the order while implementing changes that allow us to decouple prices between the elements and elements of configuration of the laptop in the frame market. When we open the order again, we will continue selling items that are already in inventory in the US. UU at the original price, while we update the prices for each item when we import a new inventory. Canadian orders that send from our US warehouse. UU. They will also remain at the original CAD price at this time, but we may need to make future price adjustments in the items that are made in China, in which we face some tariff impact.
Now, let's have more details about how tariffs work. We maintain this apolitical and share more about how it works operationally. When the goods are imported to the US, the tariffs are evaluated depending on the country of origin and the HTS code (harmonized rate schedule) that the goods are classified. We send all our DDP products (paid tax), which means that we pay tariffs as the clear goods of customs and include the cost within our products prices. The rate is calculated against the value of the product in importation, which means that our cost as a importer, instead of the final price we charge for the product. The country of origin is defined as the last location in which “substantial transformation” occurs. For computers, US Customs has specifically defined substantial transformation as the location in which the main circuit plate is assembled.
At the beginning of the framework five years ago, we anticipated greater commercial challenges between the United States and China, and we chose to build most of our manufacturing and logistics footprint in Taiwan. At that time, China imports to the US were subject to rates of section 301 of 7.5-25%, with exceptions that included laptops, but not laptop parts. Because we have assembled our main ones in Taiwan since 2022 (we also make the final system assembly and make pieces of magnesium and some aluminum pieces there), the country of origin for our laptops is Taiwan. While this has protected us largely from previous tariffs in China imports, all countries with a significant electronic manufacturing infrastructure are affected by the current round. We are actively investigating the routes to assemble the main plate in the US, but our current manufacturing partners have no necessary infrastructure. We were also in the process of moving some production of China modules to low rate regions such as Thailand and Indonesia. Migrating manufacturing partners or establishing a new manufacturing infrastructure is a long -term theoretical solution, but it is not something that we can run before the rates that enter their place this week.
This returns us to price and availability settings. Our products are based on longevity, and our business is too. We have created excellent supply and logistics chain equipment to be ready for this type of interruption, and are exploring all possible options to return to the normal fulfillment of the US. UU. We will share changes and solutions as we occur to us, and we will remain transparent at all times. Thanks for continuing to follow the trip.
(Tagstotranslate) laptops
