RECOM’s Country of Origin Strategy Minimizes Tariff Impact

RECOM designs and builds products to serve a global market. Although product technology needs are paramount, reliable sourcing is equally important to system designers. The worldwide supply chain adds sourcing and tariff challenges born of geopolitics. To mitigate these challenges and foster the same confidence in customers as a local supplier would, RECOM has adopted a country-of-origin (CO) strategy.

In early 2025, the United States imposed sweeping tariff rate increases on nearly all imported goods. These increases varied by country and, in some cases, exceeded 100%. Since the announcement, some rates have been revised, rescinded, or postponed for future implementation. Overall, the tariff actions have created a challenging environment for companies selling into the U.S. market. The use of tariffs as a tool to manage the global competition environment is not a new phenomenon. Regions such as the European Union and the United States have long applied tariffs and engaged in tariff negotiations to balance sensitivities around the country of origin of imported goods. However, the scope and scale of the recent increases levied on goods coming into the U.S. has the potential for a far greater impact.

Like all global companies, RECOM must work to minimize the impact of the tariff increases. Although the company is based in the EU, its products manufactured in other regions remain subject to elevated U.S. tariff rates. For example, China, one of RECOM’s manufacturing locations, has been targeted by the U.S. for some of the highest rates due to its trade surplus with the United States. The U.S. market is also sensitive to the loss of intellectual property, exposure of data, and uncertain safety standards with product manufactured in China. RECOM, however, ensures protection from these risks regardless of the CO. With cross-globe manufacturing capability, those risks can be further mitigated by shifting the manufacturing site.

RECOM is well positioned to continue thriving in a global market despite supply chain challenges and U.S. tariff increases. Entering 2025, the global supply chain was already under strain due to extraordinary events like the lingering effects of COVID-caused disruptions. The current uncertainty caused by U.S. tariff actions threatens to exacerbate a challenging situation. In 2006, RECOM mounted a strong push into the U.S. market. Since then, the company has built a resilient sales and support network through expansion and careful acquisitions. This history provides valuable insight into the trade conditions present in the U.S. market. The company applies a versatile supply strategy that accounts for both CO considerations and the sensitivities of regional end markets.

RECOM has manufacturing facilities in China, Taiwan, Thailand, Italy, Hungary, and Serbia. This globe-spanning manufacturing capability gives more options for supply to countries that impose high tariffs on specific regions. Both component manufacturing and final assembly can be shifted to preferential locations. This flexible manufacturing structure and strong U.S. economic experience ensures that the United States customers can reliably purchase tariff-minimized products. The goal is to offer customers the same reliability as a local supplier for customers needing RECOM’s products.

Country-of-origin, as a technical term, refers to a set of rules describing where substantial value for a product was added. Value of components, origin of the design, and the location of sub and final assembly all factor in at some level. CO is often used to determine tariff rates and can also influence consumer purchasing decisions. RECOM’s country-of-origin supply chain strategy includes both final assembly and component sourcing. The company utilizes a geographically diverse supply chain to ensure that components for its power converters come from multiple countries. This regional approach diversifies the company’s supply chain and provides alternative channels for both sourcing and supply.

According to Karsten Bier, RECOM Managing Director, “It's understandable that the U.S. administration is trying to bring manual labor jobs back to the United States with its tariff measures.” Bier further states that manufacturing labor “is unevenly distributed around the world, with high technology in the USA and other Western and Asian industrialized countries, and manual labor in other countries.” Given the limited supply of low-cost labor in the U.S., Bier does not see additional risk with RECOM’s strategy.

The global distribution of labor and infrastructure reinforces RECOM’s confidence in its country-of-origin manufacturing and distribution strategy. When highly industrialized regions like the U.S. and Europe resist purchasing products made in areas with high trade imbalances, such as China, alternative manufacturing locations become necessary. RECOM’s diversified supply chain can source from other countries of origin that are subject to lower tariffs and less buyer resistance. RECOM has built a strong distribution and support network in North America that, on a local level, ensures supply while satisfying conditions unique to the U.S. market. The network ensures products and practices comply with the United States regulations and standards for safety and intellectual property protection. It insulates customers from tariff extremes and supply chain instability and leaves open the opportunity of reshoring RECOM’s high-value products.

RECOM does not anticipate a significant impact on its ability to design, manufacture, and deliver high-quality power components anywhere in the world. Its global customer base further reduces the potential tariff impact on the business. The EMEA region (Europe, the Middle East and Africa) accounts for 45% of company revenue; 28% comes from the U.S.; and 27% from APAC (Asia Pacific).

The company does not expect near-term removal of tariffs as a geopolitical trade balance management tool. Rather, RECOM views tariffs as a long-term structural factor. Its distributed manufacturing approach positions the company ahead of the curve as global manufacturing shifts toward regional diversification, localized production, and proactive compliance strategies. A broad distribution and support network in the U.S. gives RECOM the ability to grow with the U.S. market regardless of geopolitical factors. Future moves, such as reshoring manufacturing, would only strengthen the company’s local image.

RECOM is confident in its future as a global supplier of choice in the power solutions industry. Company leadership does not view the current tariff measures as a risk to RECOM’s position as a global supplier. The company currently serves more than 120,000 customers worldwide. With a strong team of technical experts, a proven track record of innovation in power systems design, and a global manufacturing and supply base, RECOM’s infrastructure and resilient country-of-origin strategy will ensure continued success regardless of tariffs or changes in the geopolitical climate.