SupplyChainBrain reports that Josh Carr, CEO of Echo, says the hydrogen water flask and filter company has successfully built a "tariff-proof" supply chain—a notable achievement at a time when many companies are discussing the need to raise consumer prices to cover the additional costs imposed by new tariffs. According to an April 22 press release from Echo, the company made the decision in 2024 to shift production from China to the Philippines as a precaution against the tariffs that the incoming Trump administration had been hinting at for months. Today, the company is "operating at full speed," according to CEO Josh Carr, and has managed to maintain both its supply and pricing despite absorbing the "significant costs" associated with moving away from China. This includes tooling and setup fees that were previously covered by state subsidies from the Chinese government, as well as investments in new supplier relationships and equipment. Nevertheless, Echo estimates it will save approximately 10 million dollars by 2025 through its transition to the Philippines. "This is not just about delivery times—it's about insulation," says Carr. "Because we invested in flexibility before it became urgent, we can absorb price volatility."
From a supply chain perspective, Echo (Echo Hydrogen) is a U.S.-based direct-to-consumer hydrogen water flask and filter manufacturer. Under CEO Josh Carr, production was conducted in China until 2024, when it was relocated to the Philippines. Other major consumer electronics and hardware manufacturers exiting China include Apple (shifting iPhone production to India with Tata Electronics and Foxconn, and MacBooks to Vietnam); Dell; HP; Lenovo; Logitech; GoPro; Anker; Nike (Vietnam, Indonesia); Adidas; Crocs; Hasbro; Mattel; Funko; and iRobot—all implementing core China+1 strategies. Primary manufacturing exit destinations include: (1) Vietnam (Hanoi, Ho Chi Minh City, with VinFast and Foxconn facilities); (2) India (Tata, Foxconn India, Pegatron India, Wistron India); (3) Mexico (USMCA advantage, nearshoring); (4) Thailand; (5) Indonesia; (6) Malaysia; (7) Philippines; (8) Bangladesh (for apparel); (9) Poland/Czech Republic (for Europe); and (10) Türkiye.
From a supply chain perspective, the Philippines' manufacturing ecosystem involves key investment promotion agencies: the Department of Trade and Industry (DTI, with Cristina Roque as Secretary); the Philippine Economic Zone Authority (PEZA); and the Board of Investments (BOI). Major manufacturing hubs in the Philippines include Subic Bay Freeport, Clark Freeport, Cavite Economic Zone, Laguna Technopark, and Cebu Light Industrial Park. The Philippines' 2025 GSP+ status provides tariff advantages for exports to the European Union. Additionally, trade relations between the U.S. and the Philippines operate under the FY2024 Trade and Investment Framework Agreement (TIFA). On Trump's "Liberation Day" (April 2, 2025), the Philippines faces a 17% tariff—still a significant advantage compared to China's 145%+ tariff. Other low-tariff destinations include: Vietnam at 46% (suspended); Thailand at 36%; Indonesia at 32%; Malaysia at 24%; and India at 26%.
From a supply chain perspective, tariff-proofing strategies include: (1) nearshoring (sourcing from nearby countries); (2) friendshoring (sourcing from allied nations); (3) reshoring (bringing production back); (4) China+1/China+N (production diversification); (5) tariff engineering (product classification optimization); (6) foreign trade zone (FTZ) utilization; (7) bonded warehouse operations; (8) de minimis usage (being phased out); (9) first sale doctrine; and (10) HTS (Harmonized Tariff Schedule) reclassification. Key nearshoring and tariff strategy consulting firms include BCG, Bain, McKinsey, AlixPartners, Maine Pointe, Korn Ferry, Argon & Co, Inverto, Roland Berger, and Kearney. Principal U.S. federal tariff authorities include the U.S. Trade Representative (USTR, Jamieson Greer); U.S. Customs and Border Protection (CBP); and the Commerce Department (Howard Lutnick). In conclusion, Echo CEO Carr's supply chain restructuring experience suggests that the exit strategy from China is being fundamentally redesigned globally—with early action, scenario planning, and a multi-country supply base appearing as core strategic priorities for supply chain managers.
Key Takeaways:
1. Echo CEO Josh Carr shifted production from China to the Philippines in 2024—anticipating tariff pressures.
2. In 2025, Echo will realize approximately 10 million dollars in tariff cost savings.
3. On Trump's Liberation Day, the Philippines faces a 17% tariff compared to 145%+ for China.
4. "Investing in flexibility before it becomes urgent"—this is Carr's tariff-proofing philosophy.
5. China+1, nearshoring, and friendshoring are core supply chain strategies.
