Electronics Sourcing North America’s managing editor, Jon Barrett interviews NASCO Aerospace and Electronics to explain how its certified supply and custom services offer stability amid global trade instability.
What is NASCO seeing with current tariff uncertainty and how it’s affecting schedule orders?
›› Tariffs are playing a crucial role because many parts are imported, particularly from China. Rapid tariff fluctuations have added an unprecedented level of pricing uncertainty. The unpredictability of future percentages creates challenges in quoting accurate prices. With the increased uncertainty, customers can’t plan and have adopted reactionary measures to protect profits. If tariff uncertainty persists, it will have an outsized effect on schedule orders.
How have recent global tariff policies affected the aerospace and defense market?
›› Unlike high volume consumer and industrial industries, the aerospace and defense (A&D) sector purchases parts in lower volumes but higher mix. These parts tend to be older in their product life cycle and closer to obsolescence. Manufacturers have migrated many such parts to China. However, as tariffs increase, they will move manufacturing to countries with lower tariffs. This process takes time and lower volume A&D parts may be the last to shift or deemed end-of-life and never shift. For an industry already challenged by obsolescence this could make part sourcing even more challenging.
Following Covid 19’s disruption, how has the industry adapted to risks of future disruptions?
›› The pandemic highlighted vulnerabilities in global supply chains, particularly for electronic components. Manufacturers have started the process of moving production out of China to diversify risk. If possible, they tried to ‘near shore’ production in Mexico or ‘reshore’ to the US. This takes time and substantial investment. The industry is diversifying but for cost reasons there are doubts that many components can be shifted back to the US.
How has geopolitics impacted the electronics industry?
›› Geopolitics, particularly in Asia, has added to supply chain uncertainty in the short run. As trade agreements are finalized, supply from countries like Japan, South Korea and Taiwan will stabilize and become more secure. Unfortunately, tensions with China will continue to challenge any parts that can only be procured from Chinese sources.
Geopolitical tensions can further impact the industry as key inputs like rare earth metal supplies are used as bargaining chips in negotiations. Even if the US agrees to trade deals, I believe tariffs will still be elevated from historical levels.
Any final thoughts?
›› Over its 23-year history, NASCO Aerospace and Electronics has evolved to be among the top 50 authorized stocking distributor. The company’s HUBZone certification enables it to support government contracts while assisting defense contractors in achieving procurement goals.
NASCO provides its customers with unique distribution benefits typically not offered by franchise distributors. The company’s manufacturing network lets it offer over 1,400 product lines underpinned by competitive pricing, traceability and quality.
Value-added services include custom kitting, end-of-life obsolescence sourcing, excess inventory management, BoM consolidations and component testing, all backed by DLA’s quality certifications.
www.gonasco.com
