Reading time ( words)
As we turn the calendar from 2019 to 2020, it is a natural time to take stock of the past year and look ahead to the year to come. Here are a few of the top stories of 2019 from my perspective as a government relations professional working to support the electronics manufacturing industry through public policy advocacy.
Ceasefire in U.S.-China Trade War
Just before Christmas, the United States and China announced they had agreed to a “Phase One” deal that effectively pauses the trade war that has raged between the countries over the last two years. As of this writing, the deal is expected to be signed at the White House on January 15.
The Trump administration says the deal “requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange” . It also obligates China to make substantial purchases of U.S. goods and services and establishes a stronger dispute resolution process. For its part, the U.S. postponed new tariffs that were scheduled to go into effect on December 15 and cut the tariff rates on some products but retained 25% tariffs on $250 billion worth of Chinese imports, including many items used by U.S. electronics manufacturers.
IPC welcomes the deal and hopes it leads to further de-escalation in the coming months. As documented in a recent IPC study , many IPC members are feeling the pain of higher costs, supply chain disruptions, administrative hassles, and reduced access to the Chinese market as a result of the trade war.
A great deal remains unclear about the substance of the deal, including its dispute-settlement provisions, which are key to ensuring that each side lives up to its commitments. Some of China’s “structural reforms” reflect previously announced or enacted commitments, and it is not clear if or when negotiations on a “Phase Two” deal will commence.
In short, in this “Phase One” deal, China appears to have given up little, but President Trump has kept most tariffs in place and accelerated the diversification of U.S. supply chains away from China.
At IPC, we will continue to monitor and report on developments associated with this trade deal, but please don’t hesitate to contact us if you have any questions or insights to share.
Industry Applauds U.S. Adoption of USMCA
On another trade policy issue, the electronics manufacturing industry was pleased when the U.S. House approved the U.S.-Mexico-Canada Agreement (USMCA) with broad bipartisan support in late December. Ironically, this occurred the next day after the House voted to impeach President Trump. Now, the spotlight turns to the U.S. Senate, where the schedule for a vote is unclear due to the impeachment controversy.
IPC has worked hard in support of the deal. In May, IPC released a study  that found the total value of U.S. electronics trade with Canada and Mexico was $155.5 billion in 2017, with trade in electronic systems and components being especially important to the North American automobile industry. Mexico imports 34% of U.S. PCB production—larger than the next four largest markets combined.
Given the importance of North American trade to our industry, IPC believes greater certainty around improved trade rules will pave the way to continued prosperity for electronics manufacturers, workers, and consumers in all three nations.
Lead-free R&D Included in U.S. Defense Spending Bill
In a win for U.S. taxpayers, defense readiness, and the electronics industry supply chain, the U.S. House and Senate recently approved—and President Trump signed—a 2020 defense spending bill that includes $5 million for research and development on lead-free electronics in mission-critical applications.
IPC and nearly 30 of its members and allies lobbied for these funds, which are “seed money” for a longer-term R&D effort. The need for these funds may be unfamiliar to the general public, but for the aerospace and defense industries, especially, this is a big deal.
Over the last 15 years, the commercial electronics industry has largely phased out its use of lead (Pb) in the manufacturing of electronic components and circuit assemblies due to lead’s harmful effects on human health and the environment. However, the aerospace, defense, and high-performance (ADHP) electronics sectors have been reluctant to migrate to lead-free because there is not enough data on the reliability of lead-free components in such applications.
The lead-free gap between commercial and defense electronics will only grow as lead-free becomes more entrenched in cutting-edge commercial technologies, and as governments—especially the European Commission—seek even more stringent rules on the use of lead.
IPC believes a five-year, $40 million investment in a public-private R&D program would yield more than $100 million in U.S. defense savings per year and improve military readiness and overall innovation. Together with our partners in the Pb-Free Electronics Risk Management (PERM) Council —comprised of experts from government, industry, academia, and other stakeholders—IPC will continue to advocate for a robust, long-term approach to this issue.
2019 IPC Government Relations Highlights
Among the other highlights of IPC’s government relations program in 2019 are the following.
1. New Faces
Three new faces joined the IPC public affairs team. Alison James is IPC’s new senior director, Europe, based in Brussels, where she will represent the industry on issues including environment, health, and safety, workforce skills, and trade policy. Global tech trends expert Shawn DuBravac joined IPC as chief economist with a mandate to expand IPC’s research programs and provide insights on the biggest issues facing the global industry. And Kelly Scanlon, DrPH, CIH, came on board as director of environment, health, and safety (EHS) policy and research.
2. Conflict Minerals Partnership
IPC joined the European Partnership for Responsible Minerals (EPRM)  as part of its continuing efforts to help IPC members navigate the complex challenge of responsible minerals sourcing.
3. Recognition for IPC’s Work on Workforce Issues
In July, IPC and leaders of several member companies were invited to the White House for the second time in recognition of our work to expand the skilled workforce . Audra Thurston, a 23-year-old employee of Michigan-based Calumet Electronics and one of the youngest engineers in the industry, was called upon to speak about her company’s commitment to her professional development. Earlier in that same week, Chris Pilkerton, Acting Administrator of the U.S. Small Business Administration (SBA), visited the Calumet factory in Michigan’s Upper Peninsula region and took part in a roundtable discussion at Michigan Tech on workforce issues that affect the U.S. electronics industrial base .
Looking Ahead to 2020
Looking ahead to 2020, IPC’s government relations team will continue to advocate for the electronics industry on matters related to trade and tariffs, workforce skills, and environmental, health, and safety regulations. We will be actively engaged in the debate in Washington, Brussels, Beijing, and other world capitals.
Happy New Year!
Connect With Us
- Office of the United States Trade Representative (USTR), “Agreement Between the United States of America and the People’s Republic of China,” December 13, 2019.
- IPC, “Tariff War Fallout: U.S. Electronics Manufacturers Worried About Higher Tariffs and Laboring to Mitigate Impacts,” October 2019.
- IPC, “Electronics Industry Endorses U.S.-Mexico-Canada Pact; Leaders Call on U.S. Government to Promote Pro-manufacturing Policies,” May 21, 2019.
- IPC, “Pb-Free Electronics Risk Management (PERM) Council.”
- European Partnership for Responsible Minerals (EPRM).
- IPC, “White House, U.S. SBA Praising IPC and Member Companies for Efforts to Boost the Skilled Workforce,” July 25, 2019.
- IPC, “U.S. SBA Chief Visiting IPC Member Calumet Electronics, Praising its Efforts to Boost the Skilled Workforce,” July 23, 2019.
Chris Mitchell is IPC’s VP of global government affairs. Contact him at ChrisMitchell@ipc.org.