WILMINGTON — DuPont maintains it will still see sales around $12 billion this year, but it also expects to see $60 million in additional costs for the year due to tariffs.
DuPont leaders told investor analysts on Friday morning that the chemical and materials company estimates a $500 million in potential exposure, or investor risk, due to exporting products to its own offices in China for final completion before they are shipped to customers.
On the investor call, DuPont CEO Lori Koch acknowledged that DuPont has been able to “flex its own supply chain to mitigate the impact” of tariffs.
She also told investor analysts Friday that the company has identified possible solutions to reduce that exposure down to $60 million by seeking exemptions to the 145% tariff, shifting its supply chain and passing on surcharges.
Most of the $60 million in expense would come in the second half of the year.
“Overall, we have a solid game plan to continue to consistently deliver results, and we are executing well and advancing our strategic priorities,” Koch said on Friday.
China and Hong Kong also accounted for 19% of DuPont’s $12.39 billion in revenue last year, largely in part due to the huge appetite for semiconductor fabrication there. Those countries are now DuPont’s second largest market. The company has 3,600 employees at nine manufacturing sites, five research labs centers and six offices in China.
DuPont is already dealing with the fallout of the trade war. Within hours of President Donald Trump’s move to impose stiff 34% tariffs on goods imported from China in early April, China retaliated with tariffs of its own and launched an investigation into select companies, including DuPont’s Tyvek factory in Shanghai.
DuPont executives offered little news on the investigation, except that it did comply with requests for documents. Tyvek is not a factor in the company’s calculations to exposure as it is only 1% of its business, according to DuPont Chief Financial Officer Antonella Franzen.
The tariffs may also hit the electronics company — revealed to be named Qnity Electronics, Inc. — right when the spin-off completes in November. Franzen reported that the $60 million in predicted tariffs costs would be split between electronics and the industrial segment.
Incoming Qnity Electronics CEO Jon Kemp told analysts that the company is seeking similar recourse for added costs through tariffs, though exemptions are likely to play a small part of that. Instead, the company is relying on finding alternatives to U.S.-sourced materials, though products manufactured in China are sourced from other countries.
“The bulk of tariff savings and mitigation actions that we’ve done have really been on the procurement and supply-chain optimization side of the house … We’re sort of positioned well already, given the extensive footprint across the industry and here we have supplier relationships,” Kemp said.
Qnity Electronics, with its name inspired from the electric charge symbol of Q and unity, is expected to be one of the largest pure-play electronics materials and solutions companies on the market. The burgeoning company had a baseline of $4.3 billion in sales last year, with about 60% stemming from semiconductors.
Kemp said that he expects possible flat year over year growth, but he was encouraged by the global market projections in semiconductors and artificial intelligence applications, particularly in China.
“China has got data center activity going on. They’ve got a very strong EV, and automotive business that they’re supporting. Their consumer electronics businesses have been fairly strong. And as we see that kind of pan-out globally, we think that demand conditions – what we’re hearing from our customers, is those demand conditions should continue,” he said.
