An article by Mike Dano, an editor at Lightreading, yesterday provided a good perspective on observing the current attitude of the US telecom industry towards tariff issues. （电信公司在将制造转移到美国的问题上存在分歧 --- Telecom companies divided on moving their manufacturing to the US）The article cited the recent remarks of senior executives from several US telecom equipment companies and operators. From reading these remarks, one gets the impression that US companies are also waiting and seeing, and the return of manufacturing to the US still faces many challenges.
According to data from the Institute for Supply Management, the momentum of the US domestic manufacturing industry is slowing down. The institute found in its latest report that the US manufacturing industry contracted for the second consecutive month in April. Earlier this year, the sector expanded, but before that, it had contracted for 26 consecutive months.
Ed Meyercord, the CEO of network equipment company Extreme Networks, said during the company's quarterly earnings conference call, "Our original design manufacturers (ODMs) have no plans to open manufacturing plants in the US. The tariff situation is very volatile. We have ODMs in Taiwan... In the past, the factories were in China. We worked with manufacturers to move our operations from China to Taiwan, Vietnam, the Philippines, and Malaysia. Obviously, Trump's latest tariffs hit them hard and looked quite scary." However, he said these tariffs were later suspended. So currently, it has little impact on the business. He hopes that as the Trump administration reaches agreements with Taiwan (China), Vietnam, the Philippines, Malaysia, and other countries and regions, Extreme Networks will ultimately be able to avoid additional tariff costs. He also added that Extreme Networks is addressing customers' concerns about this issue by guaranteeing the current product pricing until July. "This pricing guarantee has been warmly welcomed by partners and customers," he said.
Ashish Chand, the CEO of network - connected product provider Belden, said, "There is continuous 'uncertainty' in manufacturing. I think because everyone realizes that although they may have a strategy of reshoring plus friend - shoring, the reshoring element is 100% certain. Yes, this part will definitely happen. So this is what we are seeing currently."
Elan Daskal, the CFO of network testing equipment manufacturer Viavi, said during the company's earnings conference call, "We continue to assess the potential impact of global tariffs on overall demand and order delivery times." Viavi's CEO, Oleg Khaykin, said that 15% of the company's revenue is affected by certain tariffs. He hinted that the company will alleviate this situation by ensuring that its contract manufacturers move their operations to countries with lower tariffs. "So, I think the impact of tariffs will be quite small within six months," he said.
Ed McKay, the COO of local telecom operator Shentel, said, "The vast majority of the fiber - optic and related materials we use are made in the US. We have about eight - months' worth of materials in our warehouse and have stocked up on more than six - months' worth of user equipment, such as wireless routers, cable modems, and video set - top boxes. But when these supplies run out, customers may have to pay more due to the shortage of domestic manufacturing of such products in the US."
Brad Martin, the CEO of another local operator, ATN International, said that most of the company's fiber - optic equipment is made in the US. "As we all know, the situation is dynamic, and we are closely monitoring it," he said.
In addition, the management of CommScope said that about 80% of its sales in the US in the first quarter met the requirements of the United States - Mexico - Canada Agreement (USMCA). Corning also strongly promoted the results of its manufacturing operations in the US.
For President Trump, the situation does not look ideal. Most companies are obviously still waiting and seeing, although there are already companies like Belden that are actively reshoring. The unavoidable problems for the return of manufacturing to the US are workers and costs. Currently, most of the companies willing to reshore are those like Corning, which have high profits and require few workers. Only when labor - intensive industrial enterprises like CommScope are willing to reshore can it be proved that the tariff policy is effective. For now, it is still too early, and perhaps the next six months will be crucial.
