The impact of the 2025 US anti-dumping bill on the global PCB industry

On November 7, 2024, the US Department of Commerce issued an announcement to make a preliminary anti-dumping ruling on epoxy resins imported from China, India, South Korea, Thailand and Taiwan, China. The preliminary ruling is that the dumping margin of Chinese producers/exporters is 354.99% (the margin rate after offsetting subsidies is 344.45%), the dumping margin of Indian producers/exporters is 12.01%-15.68% (the margin rate after offsetting subsidies is 0.00%-10.52%), the dumping margin of Korean producers/exporters is 16.02%-24.65%, the dumping margin of Thai producers/exporters is 5.59%, and the dumping margin of producers/exporters in Taiwan, China is 9.43%-20.61%.

Why is the PCB manufacturing industry affected?

Epoxy resin is one of the basic materials in PCB manufacturing. Epoxy resin is usually used to make copper clad laminate (CCL), which is a composite material made of glass fiber cloth impregnated with epoxy resin and covered with copper foil on the surface, forming the basic structure of PCB. FR-4 material: This is the most common PCB substrate, which is laminated with glass fiber cloth (Glass Fiber) and epoxy resin. FR-4 has excellent mechanical strength, insulation and heat resistance. Epoxy resin plays an irreplaceable basic role in PCB manufacturing, and its quality directly affects the electrical performance, mechanical stability and life of PCB. It is one of the important raw materials indispensable in PCB manufacturing. The impact of this US bill on the PCB industry is not small.

The US Department of Commerce is expected to make a final anti-dumping ruling on the products involved in the case in mainland China on January 21, 2025, and it is expected to make a final anti-dumping ruling on the products involved in the case in India, South Korea, Thailand and Taiwan on March 27, 2025. This case involves products under the US customs code 3907.30.0000.

The tariffs applicable to China's exports to the United States will change from the first column to the second column. The tax rates of the top 20 categories of products exported by China to the United States have all increased to varying degrees, among which the applicable tax rates of machinery and equipment and parts, vehicle and machine parts and accessories, integrated circuit semiconductor devices, and minerals and metals and products have increased significantly.

According to the China Trade Relief Information Network, on November 11, the Indian Ministry of Finance's Tax Bureau issued Notice No. 24/2024-Customs (ADD), stating that it accepted the anti-dumping affirmative final ruling made by the Indian Ministry of Commerce and Industry on August 14, 2024 on epichlorohydrin originating in or imported from China, South Korea and Thailand, and decided to impose a five-year anti-dumping duty on the products involved in the case from the above countries, which are: China 0-216 US dollars/ton, Thailand 298-327 US dollars/ton, South Korea 274-557 US dollars/ton, and the tax details are shown in the attached table. This case involves products under the Indian customs code 29103000.

US anti-dumping measures have a significant impact on China's PCB industry

1. Cost increase

· Tariff cost increase: The imposition of anti-dumping duties directly increases the tariff cost of export products, reducing the price competitiveness of export companies in the international market.

· Raw material cost fluctuations: Affected by anti-dumping sanctions, the import prices of certain raw materials (such as copper and aluminum foil) may rise, further increasing production costs.

2. Changes in market structure

· Decreased international market share: The market share of PCB companies in sanctioned countries will be replaced by companies in non-sanctioned countries, and the market competition pattern will change.

· Industry transfer: In order to circumvent anti-dumping duties, some companies may transfer their production bases to third countries to continue to enter the target market.

3. Reduced exports

· Decreased export demand: Anti-dumping duties raise product prices, reduce the purchasing willingness of importing countries, and lead to a decrease in export volume.

· Order loss: Customers turn to other countries with low or no tax rates for procurement, affecting the company's order volume.

4. Increased competitive pressure

·Intensified price competition: Anti-dumping duties inhibit the ability of enterprises to compete by reducing prices. When profit margins are compressed, enterprises need to seek other ways to enhance their competitiveness.

5. Industry integration and upgrading

·Accelerated industry integration: Small enterprises may be eliminated due to the difficulty in bearing rising costs, and industry concentration will increase.

·Technology upgrading and product innovation: In order to enhance added value and differentiated competitiveness, enterprises increase R&D investment and high-end product development to get rid of the impact of price wars and tax burdens.

Summary:

In 2025, anti-dumping measures will have a continuous impact on the cost and market structure of China's PCB industry, but will also promote industrial technology upgrading and global layout adjustments. Enterprises need to adopt a diversified market strategy, enhance product value, and strengthen localized production capacity to reduce the long-term risks brought by anti-dumping.

FAQ

1. Which PCB products or materials are more susceptible to anti-dumping?

Raw materials (such as copper foil, copper clad laminate) or standard PCB products involving high production and low added value (such as single-sided board, double-sided board) are more likely to become anti-dumping targets.

2.What development opportunities will there be for enterprises?

Small companies may be eliminated because they cannot afford the rising costs, and the industry concentration will increase. Companies with high-end products (such as HDI boards and flexible boards) are usually less affected.

3. How does anti-dumping duty affect the cost structure and profits of the PCB industry?

Anti-dumping duties increase the export costs of companies, while raw material prices may rise, further compressing profit margins. Companies need to maintain profitability by optimizing production processes, increasing product added value, or turning to other markets.