Components Suppliers Reacting to Tariffs ‘as They Should,’ Says Distributor Arrow

The Trade Act Section 301 tariffs that took effect Sept. 24 on $200 billion worth of Chinese imports (see 1809240011) “have not substantially hurt our business,” said Mike Long, CEO of global components distributor Arrow Electronics, on a Thursday earnings call. Most of Arrow’s hundreds of components supplier customers are reacting to the tariffs “as they should,” said Long. “Anything that is artificially created,” such as tariffs, “we’re against,” he said. “We believe that tariffs are a bad thing in general, but if one government anywhere in the world decides they’re going to increase tariffs, don’t be surprised if worldwide manufacturers” move their production to other countries of origin, as many already have, said Long. The “bottom line” is that manufacturers “need to make their money,” and “they’re all smart enough to manufacture anywhere in the world,” and most are doing so “in more than one place,” he said. Long estimates about a third of Arrow’s customers shifted at least some production away from China since the tariffs took effect, he said. Arrow is helping customers “mitigate” the “burden” of tariffs on their businesses, said Long. “We’re assisting customers who are moving manufacturing locations and rerouting supply chains.” Arrow boasts the world’s largest “proprietary real-time database” of electronics components, he said. Tariffs were “not the reason we developed the database,” but the “value it’s providing confirms our belief in the power of data,” he said.