Company: DSWL
Filing Date: 2025-07-29
Form Type: 20-F
Source: 0001174947-25-001096
Chunk: 36

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-07-29
Form: 20-F
Item: Item 3
Chunk 36
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 the status quo involving trade between the United States and China. These controversies could adversely affect our business by, among other things, causing our products in the United States to become more expensive, which could result in a reduction in the demand for our products by customers in the United States. Recently, political and trade friction between the United States and China has escalated.

On February 1, 2025, President Trump imposed a tariff of 10% on Chinese goods imported into the United States. Then, on February 4, 2025, China’s Ministry of Finance announced it would impose, effective February 10, 2025, a tariff as high as 15% on US goods imported into China.

Between February 1, 2025 and April 12, 2025, China imposed additional tariffs on US goods equal to 148%, while the United States imposed additional tariff rate on Chinese goods equal to 135%. On May 12, 2025, both countries had agreed to a temporary pause on reciprocal tariffs of starting on May 14, 2025. The effective tariff rate on Chinese imports was reduced to 30%, while the Chinese tariff rate on American goods was reduced to 10%.

The trade war has been extended to non-tariffbarriers, such as export controls on critical minerals and restrictions on advance technological products or designs. This has created disruptions to global supply of resources leading to delays and higher prices. While the whole world is closely monitoring the status of the US China trade dispute. The two countries once again have come to another meeting and agreed on further pause by 90 days of higher tariffs.

A truce was reached between the United States and China on June 11, 2025. Currently, US tariffs are set at 55% on Chinese goods while China’s tariffs remain at 10%.

The trade controversy between the United States and China is still evolving, and we cannot predict future trade policy. However, future tariffs could cover more or all of our products, resulting in an adverse effect on our operations, including customer demand, or on the prevailing market price of our common shares.

Heightened tensions in international relations, including between the United States and China, the Russia-Ukraine war and the Israel-Hamas conflict, may adversely impact our business, financial condition, and results of operations.

The United States and global markets are experiencing volatility and disruption from the escalation of geopolitical tensions. The Russia-Ukrainewar, Israel-Hamasconflict, and other volatility in the Middle East and