Distributor TTI, Inc. Explains Tariff Position in Customer Letter

In a letter to customers dated July 3, TTI, Inc, a specialty distributor of electronic components announced that it will not be raising prices in the near term to reflect tariffs on Chinese goods.

As communicated earlier, the information available regarding the Section 301 Import Tariffs is ever changing and the situation is evolving on a daily basis. There are still many unanswered questions and missing critical details. For this reason, TTI will NOT begin assessing and charging the tariffs on July 6 as we previously communicated. We have made the decision to delay the assessment & billing of the tariffs that go into effect July 6, 2018, to give our customers more time to prepare, and give all of us, including our suppliers, more time to fully understand the details. The date to start the assessment & billing will be determined in the coming weeks but the implementation date will not be before August 15, 2018. TTI will pay any assessed tariffs due on products imported from China during this period and, in doing so, will shield our customers from incurring or paying any tariffs on shipments until at least August 15, 2018.

The following are the key points related to the Section 301 Import Tariffs, as we know today:

1. The tariffs are scheduled to be imposed on July 6 on the importation of various electronic components made in China. Products manufactured in Taiwan and Hong Kong are not subject to the tariffs.
2. TTI will NOT implement the tariffs on July 6 but will delay to a future date. The delay will last until at least August 15, 2018. Between July 6, 2018 and the time in which we implement the tariff with our customers, TTI will pay all tariffs due on products during this period and will not pass those costs on to our customers.
3. We expect all suppliers to pass through the tariff to their distributors (including TTI) and direct customers.
4. TTl’s approach for billing customers is to accumulate the tariff over a defined period and to provide a standalone invoice for the tariff charges.
5. Since many suppliers produce components in multiple countries it is not known until time of receipt/shipment if the Country of Origin on the components being will be China or another country for which the tariff does not apply. For this reason, we will not always know the Country of Origin at time of order placement.
6. We are working diligently with our suppliers to compile a list of the affected products. As soon as that task is completed, we will make it available to our customers.

The situation is fluid and we will continue to communicate with you as circumstances warrant further updates.