In Response to the Impact of Tariffs, Many Manufacturing Companies have Spoken Out
On April 2, 2025, the Trump administration announced a 54% comprehensive tariff increase on China (10% base tariff + 34% reciprocal tariff), with mechanical and electronic products bearing the brunt. The import cost of core components of CNC machine tools, such as servo systems and high-precision ball screws, will increase by more than 50%.
This policy has a direct impact on the core areas of China’s exports to the United States: the price competitiveness of products such as CNC machine tools, industrial robots, and construction machinery has been significantly weakened. Taking a CNC machine tool priced at 100,000 US dollars as an example, the cost after the tariff will soar to 154,000 US dollars, significantly reducing the price advantage of related Chinese products in the US market. However, it is worth noting that many leading domestic companies have stated that although they will face short-term pain, the actual impact is manageable. This technology blockade has instead accelerated the process of domestically producing replacements for core components such as servo motors and precision guides.
Driven by both policy and demand, domestic substitution has entered an accelerated period
High-end equipment is the “backbone” of the manufacturing industry and an important foundation for implementing the strategy of strengthening the manufacturing industry, promoting new-type industrialization, and developing new productive forces. At present, there are already more than 100 high-end equipment manufacturing enterprises on the Sci-Tech Innovation Board, covering advanced process equipment such as industrial machine tools, industrial robots, and laser processing. The downstream sector covers key areas such as rail transit, automobiles, electric power, aviation, logistics, and other areas that affect people’s lives and the country’s economy, providing key equipment support for the transformation and upgrading of China’s manufacturing industry. In the field of domestically produced machine tools, significant progress has been made in technological innovation and market expansion.
The localization rate has achieved a major breakthrough. The five-axis gantry machining center developed by Nantong Guosheng Zhike has achieved domestic substitution, with a price that is only 50% of that of imported products. The localization rate of core components of Kode CNC has reached 85%, filling the gap in the aerospace field. The installed capacity of Shenyang Machine Tool’s i5 intelligent system has achieved a year-on-year growth of 210%. In recent years, Huazhong Numerical Control has made continuous breakthroughs in tackling core technologies. Benchmarking against advanced foreign high-end numerical control systems, they developed the Huazhong 8 high-end numerical control system, which has reached the international advanced level in terms of function, performance and reliability, achieving import substitution.
Technological breakthroughs have led to major breakthroughs. Through independent research and development, Kode CNC has launched the KTBM 1200 six-axis five-linkage blade processing center. This machine tool has achieved 100% localization of core components. Its appearance has completely broken through the technological blockade of countries such as Germany and Japan in the field of precision machining, and has greatly improved processing efficiency by three times. At the same time, the reliability of domestically produced high-end machine tools has also been greatly improved. Relevant data shows that the mean time between failures (MTBF) of domestically produced high-end machine tools has increased significantly from 800 hours in 2018 to 2,000 hours in 2024.
Most STAR Market companies say “less impact, generally controllable”
In the field of intelligent manufacturing, many companies on the Sci-Tech Innovation Board have a not insignificant proportion of overseas revenue. Among them, a person from the securities department of Junpu Intelligence told the reporter from the Sci-Tech Innovation Board Daily, “The company’s revenue in the United States is not high, the largest is Europe, followed by the domestic market. The company has a factory in the United States, and the overall impact of the current tariffs on the company is still being assessed.” According to its 2024 interim report, the company’s overseas revenue accounts for more than 70% of its total revenue.
A person from the securities department of Xianhui Technology told the reporter from the “Sci-Tech Innovation Board Daily” that “the company’s US export business is relatively small, and the business exported to Europe accounts for the largest proportion. The company will continue to pay attention to the impact.” According to its 2024 interim report, the company’s overseas revenue accounts for more than 30% of its total revenue.
A person from the securities department of Oukeyi, a manufacturer of cemented carbide products and CNC cutting tools, told the reporter of the Science and Technology Innovation Board Daily that the company’s cutting tool products are currently not covered by the “reciprocal tariff”, but it remains to be assessed whether downstream customers will be affected. It is reported that the company’s raw material tungsten is mainly purchased domestically, with a stable supply, and the company has long-term cooperation with its major suppliers. By flexibly adjusting the procurement method of raw materials, the company can control the cost of raw materials, which will not have a substantial impact.
In the field of CNC machine tools, Kode CNC stated that neither the company’s core technology nor the procurement of parts involves US-origin goods, so China’s additional tariffs on the US have not had an impact on the cost of the company’s five-axis CNC machine tool products. The company has long insisted on independent research and development of key functional components, including five-axis CNC systems, servo drives, motors, rotary tables, swing heads, electric spindles, and serialized sensors. By localizing the supply chain and replacing imported parts with domestically produced ones, the company has effectively avoided the risk of being locked out of core component technologies, while also reducing cost fluctuations caused by trade wars and other uncertainties.
In the semiconductor field, regarding the impact of the so-called “reciprocal tariff” policy announced by the United States, Wang Jue, deputy general manager and board secretary of Espressif Systems, told the reporter of the “Sci-Tech Innovation Board Daily”: “Although tariff factors may indeed impact market demand in specific regions of the United States, the steady growth of the company’s business is mainly due to the deep penetration of digitalization in various industrial fields. From a global perspective, whether it is the Chinese market or other overseas regions, the continuous expansion of downstream application scenarios has created more digitalization needs, and this trend has promoted the continued expansion of the industry. Our strategy is to continue to expand into new application scenarios.”
A relevant person from the securities department of Montage Technology told a reporter from the Science and Technology Innovation Board Daily, “Currently, very few customers require delivery of products in the United States. In 2024, the company’s revenue from products delivered in the United States will account for less than 1%. The direct impact of this additional US tariff policy on the company is minimal, but the impact on the entire supply chain upstream and downstream still needs to be further observed. Relevant measures will be formulated based on the trend going forward. At present, the additional US tariffs have not affected sales in other regions, and the company’s operations are normal.”
In terms of semiconductor equipment, a relevant person from the securities department of Aiscent Microelectronics told the reporter from the “Sci-Tech Innovation Board Daily”: “The company’s overseas revenue accounts for a small proportion, and the impact is generally controllable. At present, some raw materials need to be imported, but the volume is not large and the proportion is not high.”
Liu Chunsheng, associate professor at the Central University of Finance and Economics, said that for listed companies with a large proportion of key industries and export business, they can adjust their production layout by building factories in overseas low-tariff areas and optimizing the supply chain; diversify their markets by exploring emerging markets and cultivating the domestic market; enhance technological innovation to increase the added value of products and promote industrial upgrading; and pay attention to policy developments and participate in policy communication to cope with tariff shocks and reduce risks.