Teco to assess drone part production in U.S. after new tariff

Taipei, Aug. 14 (CNA) Taiwan-based Teco Electric & Machinery Co. said Friday that it will assess the feasibility of producing drone components in the United States after U.S. President Donald Trump announced overnight that Washington will impose up to 100 percent tariffs on unmanned aerial vehicle (UAV) imports.

The remarks made by Teco, which specializes in developing power systems for drones, came after Trump signed a proclamation to impose a 100 percent ad valorem tariff on drones of a certain size or with certain capabilities that are particularly sensitive for national security purposes.

However, drones and components from Taiwan, the European Union, Japan, South Korea, Switzerland and Liechtenstein will face a 15 percent tariff, with a 10 percent tariff imposed on products from the United Kingdom.

The tariffs will take effect 21 days after the signing, while for components of drones that are not particularly sensitive, the tariffs will be imposed 180 days after the signing, the White House said.

Teco said it currently operates a drone power system production base in Taoyuan's Zhongli District and will study setting up a U.S. facility to produce drone components to mitigate the impact of the new tariffs.

According to Teco, drones equipped with its power systems are largely used for commercial and agricultural for applications including logistics, firefighting and other disaster relief, solar panel cleaning and pesticide spraying

Drone maker Thunder Tiger Corp. said Trump's new tariffs are more about restructuring the global supply chain than the tariff issue itself.

Thunder Tiger said the new tariff polices could lead the company to increase its drone production capability in the U.S. to secure more orders from the Pentagon at a time when the U.S. is seeking to build a trusted supply chain and eliminate dependence on China.

According to Thunder Tiger, the company currently has productions lines in California and Ohio.

Meanwhile, advanced driver-assistance system (ADAS) solution provider CUB Elecparts Inc., which has entered the drone countermeasure system business, told CNA that the company is not concerned about the Trump tariffs as its products are not covered by the new taxes.

In addition, CUB said the U.S. is not the company's major buyer so the new tariffs are unlikely to have a direct impact on its products. Still, CUB said as a defense technology provider, the company will continue to watch closely whether the U.S. and other global markets change their trade policies.

For its part, E-Lead Electronic Co., a Taiwanese supplier of augmented reality head-up display (AR-HUD) used in cars, which has expanded into finished drone and precision drone engine component production, said Europe is its main market for drone products so the company expects little impact from Trump's new tariffs.