ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Companies

US tariff on China reroutes Meidensha's production of grid parts

Japan electric appliances maker seeks bigger American share with local output

Meidensha seeks greater shares in the U.S. market for circuit breakers used in electrical substations such as this one.

TOKYO -- Electric appliances producer Meidensha will move manufacturing of power grid equipment to the U.S. from China to expand sales in the country while avoiding a heavy tax levied on Chinese-made goods amid the trade war.

Meidensha already has begun production of vacuum circuit breakers with Japanese-made parts in the state of South Carolina, and shipments are slated to start in February.

The company previously shipped semifinished circuit breakers made in Shanghai to U.S. customers, which added parts for sale to distributors of grid equipment. The vacuum circuit breaker is a switch designed to protect an electrical circuit against damage caused by excess current from an overload or short circuit.

The manufacturing shift comes as President-elect Joe Biden is expected to maintain Washington's tough stance on China. Meidensha will recalibrate its production network to cope with continuing trade tensions between the two countries.

The U.S. announced higher tariffs on Chinese goods in June 2018, with the levy on vacuum circuit breakers rising to 27% from 2% in July that year, pushing Meidensha to consider calibrating a response.

Meidensha's vacuum circuit breaker

Meidensha's move follows those by compatriots Kyocera and Ricoh, which shifted production bases from China to Southeast Asia for products sold in the U.S.

"In addition to dealing with the tariffs, we have to think about the impact of the coronavirus becoming protracted," President Takeshi Miida said. "We will prepare for the risk to the supply chain by diversifying our bases."

Research firm Global Market Insights estimated the worldwide power transmission and distribution equipment market at $100 billion in 2019. A subsidiary of Hitachi is the biggest supplier, controlling 9% of the global market, followed by Siemens and General Electric.

Meidensha's consolidated sales totaled 255.7 billion yen ($2.47 billion) in the fiscal year ended March 2020, with 146 billion yen coming from the infrastructure business including vacuum circuit breakers.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more