Company: PACB
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001299130-25-000061
Chunk: 605

Company: PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1A
Chunk 605
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 significant legal expenses and divert our management’s attention from the operation of our business.

Enhanced trade tariffs, import restrictions, export restrictions, or other trade barriers may materially harm our business.

We are continuing to expand our international operations as part of our growth strategy and have experienced an increasing concentration of sales in certain regions outside the United States, especially the Asia-Pacific region, as discussed above. There is currently significant uncertainty about the future relationship between the United States and various other countries, most significantly China, with respect to trade policies, treaties, government regulations and tariffs. Starting in September 2018, the U.S. Trade Representative (the “USTR”) enacted various tariffs ranging from 7.5% to 25% on the import of Chinese products, including non-U.S. components and materials that may be used in our products. Since that time, USTR has enacted further tariff increases on certain Chinese products, in some instances raising the additional tariffs on these projects to up to 100%. In February 2025, the U.S. government also enacted an additional 10% ad valorem tariff on almost all imports of Chinese-origin goods, and in March 2025, this tariff was further escalated to 20% ad valorem. Additionally, China also has imposed tariffs on imports into China from the United States. These tariffs have and could continue to raise our costs. Furthermore, tariffs, trade restrictions, or trade barriers that have been, and may in the future be, placed on products such as ours by foreign governments, especially China, have raised, and could further raise, amounts paid for some or all of our products, which may result in the loss of customers and our business, and our financial condition and results of operations may be harmed. In February 2025, the Trump Administration also announced new 25% tariffs on imports from Canada and Mexico, which were temporarily suspended subject to further negotiations, and partially implemented with respect to goods not eligible for duty-free import under the U.S.-Mexico-Canada Agreement as of March 2025. U.S. tariffs of 25% have also been implemented on a wider array of imported steel and aluminum items as of March 2025. Additional tariffs on a wider range of countries may be forthcoming. Further tariffs may be imposed that could cover imports of additional components and materials used in our products, including for example semiconductor chips, or our business may be adversely impacted by retaliatory trade measures taken by China, Canada, the EU, or other countries, including restricted access to components or