This week on China Corner Office, Chris Marquis talks to Dan Digre from MISCO a St. Paul Minnesota-based company that produces audio speakers. Over the past 20 years, MICSO has built a successful business by importing low-tech components from China, and then through expertise in engineering, design, and final assembly and testing, reconfiguring them into high-tech products. But this model is threatened by the China tariffs. Dan describes how the components that he imports are hit with a 25% tariff, yet if he were to fully assemble the speakers in China instead of the U.S. and import the finished product, the tariff would only be 7.5%. The tariffs thus not only hurt his sales due to his higher costs but also, given this discrepancy, encourage further loss of jobs in the U.S. and offshoring of the type of higher value-added manufacturing MICSO does.
