As a results of the brand new tariffs that have been introduced final week, we’ve got a sequence of unlucky worth and availability changes we have to make for US prospects. We manufacture most of our merchandise in Taiwan, for which we now face a brand new 32% import tariff into the US. We’re absorbing a part of this value quickly, and we’re rising costs on in-stock laptops and new system pre-orders by roughly 10% for US prospects. For our lowest-priced configurations, the place we will’t afford to soak up the tariffs, we’re at the moment pausing gross sales to the US. We’re additionally delaying the pre-order launch of Framework Laptop 12 within the US. We’re persevering with to watch adjustments to tariffs, and we are going to make extra changes if wanted. For non-US prospects, there’s at the moment no tariff affect, and we’re retaining the identical pricing and availability of our merchandise.
First, I need to acknowledge that this sucks, for you, for us, and for our mission to remake Consumer Electronics. We will get by means of it. This isn’t the primary problem we’ve confronted, and it gained’t be the final one. We’ll navigate by means of and maintain targeted on delivering nice merchandise and fulfilling this mission. We’re going to stay open and clear all through and attempt to carry readability to a messy state of affairs wherever we will.
Next, let’s go into extra element on the particular adjustments we’re making. Our Framework Laptops, Mainboards, Framework Desktop, and a subset of our modules are made in Taiwan, which implies they’re now impacted by a 32% import tariff to the US. Those are the merchandise we’re rising pricing on by 10% within the US, and we may have to extend this additional if tariffs persist. Many of our modules are at the moment manufactured in China, the place we face between 104% and 129% (!!!) tariffs. On these modules, we’re additionally absorbing a part of the tariff and rising pricing, relying on the class. Our Western Digital storage is manufactured in Malaysia, which now faces a 24% tariff. We’ve additionally elevated storage pricing by as much as 10%, however suggest that you just buy it elsewhere to your DIY Edition if attainable, like immediately from the Western Digital web site.
These adjustments are going into impact now within the US for each in-stock orders and for brand new pre-orders. We’re enacting tariff absorption together with worth will increase as a brief measure whereas we observe the evolving state of affairs round tariffs. In the occasion tariffs are eliminated, we’ll reset pre-orders that haven’t but been fulfilled again to their earlier costs. If tariffs persist or improve, we’ll seemingly want to extend US costs additional. For present US pre-orders of Framework Laptop 13 (AMD Ryzen AI 300 Series) and Framework Desktop, we’re nonetheless figuring out tips on how to deal with the tariff affect. In the occasion we have to regulate pricing, we are going to ask to your affirmation on the brand new worth earlier than finalizing your pre-order. We’ve additionally quickly eliminated the performance to edit configurations of present US pre-orders, however you’ll nonetheless have the ability to edit your order at pre-order finalization. As all the time, pre-orders stay absolutely refundable. We’ll maintain you up to date on US pre-order timing for Framework Laptop 12. We’re reserving some manufacturing capability for US orders to have the ability to ship alongside orders from different nations.
For US orders of components and modules that ship from our New Jersey warehouse, we’ve quickly paused ordering whereas we implement adjustments that permit us decouple pricing between laptop computer configuration gadgets and gadgets within the Framework Marketplace. When we open ordering once more, we’ll proceed to promote gadgets which can be already in stock within the US on the unique worth, whereas updating pricing for every merchandise once we import new stock. Canadian orders that ship from our US warehouse may even stay on the unique CAD worth for the time being, however we might have to make future worth changes on gadgets which can be made in China, on which we face some tariff affect.
Now, let’s get into extra element about how the tariffs work. We’re retaining this apolitical and sharing extra about how this works operationally. When items are imported into the US, tariffs are assessed based mostly on the nation of origin and the HTS (Harmonized Tariff Schedule) code that the products are categorised as. We ship all of our merchandise DDP (Delivered Duty Paid), which means we pay tariffs as items clear customs and embody the price inside our product pricing. The tariff is calculated in opposition to the worth of the product at import, which means our value because the importer, fairly than the ultimate worth we cost for the product. The nation of origin is outlined because the final location during which “substantial transformation” happens. For computer systems, US Customs has particularly outlined substantial transformation as the placement at which the primary circuit board is assembled.
When beginning Framework 5 years in the past, we anticipated elevated commerce challenges between the US and China, and we selected to construct most of our manufacturing and logistics footprint in Taiwan. At the time, imports from China to the US have been topic to 7.5-25% Section 301 tariffs, with exceptions that included laptops, however not laptop computer components. Because we’ve assembled our Mainboards in Taiwan since 2022 (we additionally do remaining system meeting and make magnesium components and a few aluminum components there), the nation of origin for our laptops is Taiwan. While this has largely shielded us from earlier rounds of tariffs on imports from China, all nations with a significant electronics manufacturing infrastructure are impacted by the present spherical. We are actively investigating paths to carry out Mainboard meeting within the US, however our present manufacturing companions would not have mandatory infrastructure in place. We have been additionally already within the technique of transferring some module manufacturing from China to lower-tariff areas like Thailand and Indonesia. Migrating manufacturing companions or organising new manufacturing infrastructure is a theoretical long run resolution, however just isn’t one thing we will execute forward of tariffs coming into place this week.
This brings us again to the value and availability changes. Our merchandise are constructed round longevity, and our enterprise is simply too. We’ve constructed wonderful Supply Chain and Logistics groups to be prepared for this sort of disruption, and they’re exploring each attainable choice to get again to regular US achievement. We’ll share adjustments and options as we give you them, and we’ll stay clear all through. Thanks for persevering with to observe alongside the journey.
