UEI Surprised by Trump’s Mexican Tariff Plans, CEO Tells Investors
Universal Electronics Inc. CEO Paul Arling considered hypothetical solutions at a Tuesday investor conference in response to analyst questions on the company’s plans for manufacturing in light of the Trump administration’s plans to impose tariffs next week on goods brought…
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in from Mexico. UEI was “a little surprised -- unpleasantly surprised” to hear of Donald Trump's plan for tariffs on goods imported from Mexico (see 1905310033) with the company in the midst of moving “a good percentage” of manufacturing from China to a facility in Monterrey, Mexico, Arling said. The company has historically produced goods such as remote controls in China, but it began last year shifting “nearly half of our units” out of China because “we do not wish to absorb a 25 percent increase; nor do our customers.” On how UEI plans to respond to Mexican imports, set to kick in at 5 percent Monday and rise incrementally to 25 percent in October, Arling said, “we’re going to play that by ear.” He referenced the company’s past efforts to find production locations “other than China,” listing the Philippines, where it has some operations, and Vietnam as options. It took six months to move from China to Mexico, Arling said. UEI looked at opening a factory in the U.S. “a few years back” but decided “you’d be so cost uncompetitive that you wouldn’t be able to compete -- you wouldn’t even be close on price,” Arling said.