For those who might not have caught up yet, President Donald Trump has started imposing a series of tariffs on countries like Mexico, China, and Canada. Unfortunately, if you’re keeping an eye on the tech industry, the outlook is not particularly optimistic.
Trump’s new tariffs could throw a wrench into the consumer tech industry, given that a significant portion of imports comes from China. We’ve touched on how these tariffs could shake up the consumer industry several times before, but now that they’re officially in play, buyers need to brace themselves for the upcoming changes. Presently, Trump has slapped a 25% tariff on Mexico, another 25% on Canada, and a 10% tariff on China. While we’ll steer clear of diving deep into the political side of things, it’s essential we explore what this means for consumer tech, drawing insights from our estimates and past statements from industry groups such as the Consumer Technology Association (CTA).
To put this in perspective, The Kobeissi Letter summed it up in a tweet, noting, “The trade war has officially begun… New tariffs of 25% on Mexico, 25% on Canada, and 10% on China are now live.” They also pointed out how exports from Mexico and Canada to the U.S make up about 78% and 77% of each country’s total exports.
Focusing on China, it’s a major player, sending loads of consumer tech goodies to the U.S., notably in PC hardware. With the introduction of this 10% tariff, it’s highly likely we’ll see hardware component prices skyrocket. The precise extent of the price hike is still not entirely clear, as Trump mentioned the possibility of an even stricter approach if nations retaliate. Not too long ago, we discussed the potential for hardware prices to jump by as much as 40% should the tariffs on China rise to 60%—a figure Trump threw around during his pre-election promises.
Here’s a snapshot from the CTA: laptops and tablets could see a 46% increase, video game consoles by 40%, and smartphones by 26%. Their research further suggests that a 60% blanket tariff on Chinese imports might encourage companies to shift production elsewhere, potentially bypassing the U.S.
Leading companies such as NVIDIA, AMD, and Microsoft aren’t sitting idle. They’re already gearing up for these tariffs. This preparation means they might soon raise consumer prices, using the President’s policy as justification. While there’s no need to hit the panic button just yet, it’s fair to say that prices will climb, impacting not just tech markets but other sectors too, considering Mexico and Canada are involved in various consumer industries.
It’s safe to assert that we’re stepping into a trade war—or at least an unofficial one—and the burden will likely fall on the average consumer, particularly those invested in the tech sector. While we hope for an improvement down the line, things seem poised to get complicated.
