Now Trump's import tariffs could raise the cost of a laptop for Americans by 68%
- Reference: 1736293360
- News link: https://www.theregister.co.uk/2025/01/07/trumps_tariff_electronics_prices/
- Source link:
The US-based association's [1]latest study looks at two scenarios that have been floated by the incoming president: If Trump enacts a global 10 percent import tariff and imposes an additional 60 percent for China; and if he raises global import tariffs to 20 percent with an additional 100 percent for China.
This comes after the CTA, which organizes the annual CES mega-conferences and represents the United States' $400 billion-odd personal and home tech industry, earlier [2]suggested Trump's import tariffs would result in prices for laptops and tablets rising by as much as 46 percent in America.
Tariffs are a tax on American businesses and consumers
Referring to ten product categories – laptops, smartphones, connected devices, video game consoles, computer accessories, monitors, desktop computers, televisions, lithium-ion batteries, and speakers and headphones – "even accounting for alternative sources of supply and potential new US production, the proposed tariffs on these ten products alone would reduce American consumers' spending power by $90 billion to $143 billion a year," the report claimed.
"Price increases would be substantial if suppliers pass all the higher costs through to final consumers. Buyers of laptops, tablets and smartphones would feel the greatest impact."
[3]
In the first scenario, the CTA – which has a vested interest here as it obviously would rather not have sales-killing levies on consumer goods – predicted the price of laptops and tablets would rise 45 percent for American buyers; games consoles would rise 40 percent; monitors would cost 31 percent more; and smartphone prices would rise 26 percent.
[4]
[5]
But if Trump – who ran for office [6]on a promise to lower people's grocery costs – enacted the harsher tariff regime, laptops and tablets prices would soar by 68 percent, consoles would see price increases of 58 percent, monitors would cost 48 percent more, and smartphones would be 40 percent more expensive, it is claimed.
"The tech sector is America’s economic engine, driving global innovation and job creation," [7]said CTA CEO Gary Shapiro. "Proposed tariffs threaten the deflationary power of tech in the global economy. Tariffs are a tax on American businesses and consumers. We urge the incoming administration and Congress to prioritize an Innovation Agenda that fosters growth."
[8]
Trump's argument is that slapping more tariffs on electronics that are made in China and imported into the United States will force manufacturers to onshore their factories, back to the US, and build products domestically. The report doubts this will ever happen, and instead, manufacturing will simply shift from China to other countries that are cheaper to operate in than the US, and have lower tariffs, which is in line with earlier [9]research on the topic.
Even if manufacturing did come back to America, the industry would still be dependent on Chinese component suppliers. The Middle Kingdom has invested to lead certain key sectors, such as lithium-ion battery production, low-spec processors, and high-volume parts for consumer electronics.
[10]Tech titans hide in shadows awaiting Trump tariff threats
[11]Trump tariffs transform into bigger threats for Mexico, Canada than China
[12]If Trump gets elected, get your tech buying done asap
There's also the question of retaliatory tariffs being levied against American exporters, since the rest of the world is also likely to raise barriers of their own against the US. Canada, amid [13]continuous trolling by Trump as well as threats of tariffs and more, is [14]said to be drawing up a list of retaliatory levies.
And last year, the Mexican government [15]warned that Trump's tariffs could result in the loss of 400,000 US jobs and and raise the average price of some vehicles, such as pickup trucks, by $3,000 or more apiece.
Some in the technology world have been urging Trump to spare their industry, and the president-elect was [16]reportedly going to soften his stance on the issue. However, on Monday, Trump denied this was the case.
[17]
"The story in the Washington Post, quoting so-called anonymous sources, which don't exist, incorrectly states that my tariff policy will be pared back," he [18]said on Truth Social. "That is wrong. The Washington Post knows it's wrong. It's just another example of Fake News."
Trump has proposed, for one thing, offsetting people's federal income tax bills with tariff revenue, which is a whole new kettle of fish: Prices still likely rise for everyone, but folks who file their taxes may pay less, depending on how it's all calculated. ®
Get our [19]Tech Resources
[1] https://shop.cta.tech/collections/research/products/how-the-proposed-trump-tariffs-increase-prices-for-consumer-technology-products-january-2025
[2] https://www.theregister.com/2025/01/02/trump_tariff_pc_prices/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z34GfNFJjItPH3TcefDtgQAAANc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z34GfNFJjItPH3TcefDtgQAAANc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z34GfNFJjItPH3TcefDtgQAAANc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://abcnews.go.com/Politics/trump-now-bringing-grocery-prices-promised-hard/story?id=116763207
[7] https://www.cta.tech/Resources/Newsroom/Media-Releases/2025/January/U-S-Tech-Industry-Forecasts-Record-Sales,-Tariff-T
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z34GfNFJjItPH3TcefDtgQAAANc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://www.cta.tech/Resources/Newsroom/Media-Releases/2023/October/Landmark-Study-Shows-Bringing-All-Tech-Manufacturi
[10] https://www.theregister.com/2025/01/03/tech_titans_hide_in_shadows/
[11] https://www.theregister.com/2024/11/26/trump_tariffs_mexico_canada/
[12] https://www.theregister.com/2024/11/01/us_trump_tariff/
[13] https://thehill.com/homenews/administration/5071665-trump-economic-force-canada/
[14] https://www.theglobeandmail.com/politics/article-ottawa-mulls-early-announcement-of-retaliatory-tariffs-on-us-goods/
[15] https://www.reuters.com/markets/mexico-warns-trumps-tariff-would-kill-400000-us-jobs-2024-11-27/
[16] https://www.washingtonpost.com/business/2025/01/06/trump-tariff-economy-trade/
[17] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z34GfNFJjItPH3TcefDtgQAAANc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[18] https://truthsocial.com/@realDonaldTrump/113781828670659948
[19] https://whitepapers.theregister.com/
The US imports over 330 billion dollars worth of stuff a month, peaking at 352 billion last September before dropping off slightly. Good luck replacing all that, especially things like seasonal food, food currently affected by drought in the US & electronics as the supply chain doesn't exist. Add in the currently low unemployment rate in the US and who will produce all this local supply?
China centralises its factories in hubs like Shenzhen. These hubs have the infrastructure, ports, supply chains & pool of trained workers that would cost the US trillions to replicate. Who is going to invest in that? Even assuming somebody did, US workers would need to be willing to work for Chinese pay & conditions to try compete on price.
One example. Purism make the only smartphone currently produced in the US, the Librem 5. They started US production during COVID as they struggled getting supplies of the overseas built version. The US built version costs $1999 and still includes some Chinese & Indian parts. The overseas built version cost $1299. Are US consumers willing to pay the $700 premium for US made?
> Are US consumers willing to pay the $700 premium for US made?
I don't see why that's a thing. I bought a Moto G over a Google Pixel back when they were made in Ft. Worth, Texas. It wasn't that expensive. "Cheap and cheerful" was what El Reg said.
Unfortunately, it had only a partially working touchscreen, and even more unfortunately they completely botched the return process, sending me an urgent airmail envelope that I wasn't allowed to use with their return service and noting the wrong model of phone.
Soon after that, Motorola closed the Texas plant.
So Motorola closed the Texas plant since it was not economically viable to compete with overseas production. That makes the point really.
Now nobody makes any smartphone in the US except Purism. This is their blog post explaining why they chose to do so, despite the increased cost.
The Benefits of Manufacturing Domestically
Purism began manufacturing their Librem smartphone in the US at the height of the pandemic, when COVID-related delays and a global chip shortage were wreaking havoc to the electronics industry. By sourcing the majority of the phone’s parts domestically (with the exception of the chassis, which is made in China, and the WiFi card, which is made in India), Purism was able to avoid the shipping and labor disruptions that its competitors grappled with.
For instance, Apple has struggled with pandemic-fueled supply issues as recently as November 2022, when a COVID surge impaired iPhone production at a facility in China. Meanwhile, in the early weeks of the pandemic, Samsung had to delay the launch of a new Galaxy Note due to travel restrictions preventing entry from the company’s headquarters in South Korea to production facilities in Vietnam. In addition to COVID, geopolitical conflicts have complicated traditional globalized supply chains—ongoing tensions between the US and China have introduced new obstacles to resilient supply chains in the electronics sector.
By manufacturing and assembling the Librem 5 in the US, Purism seeks to avoid getting entangled in complex international dynamics, while also saving on shipping and transportation costs.
Downsides: Increased Cost
However, these advantages also come with downsides. While the original, foreign-made Librem 5 retails at $1299, its US-made counterpart is significantly more expensive, priced at $1999. This increased price tag reflects the economic barriers to manufacturing domestically.
Even assembly in the US doesn't mean no tariff
Because most of the parts will have come from overseas, and have tariffs associated with them. You're going to be paying a hefty tariff markup since the most expensive parts like the display and the SoC are imported (as well as cheaper parts like the battery)
I expect Trump will be forced to carve out so many exceptions to his tariffs that they might as well not exist, but he can't not do them after loudly promising 1000x over that he was going to do exactly that. So he'll do just a little bit so he can claim "promise kept" like he claimed he "built the wall" when he built like 20 miles worth out of a 2000 mile border.
Re: Even assembly in the US doesn't mean no tariff
So he'll do just a little bit so he can claim "promise kept" like he claimed he "built the wall" when he built like 20 miles worth out of a 2000 mile border.
And Mexico paid for it? He won't even go that far, he'll just say the 'deep state' kept him from doing anything. Most of the things he ran on this time, he was going to fix last time. Drain the Swamp, build The Wall, solve illegal immigration. He achieved none of them, but it was always someone else's fault.
What he will do is carve out exceptions for industries that 'contribute' to him. Then complain about 'Deep State' or Libs blocking his plans. Or throw out another conspiracy squirrel to distract the weak minded so they forget about tariff promises.
Buried lede
Why TF does even the foreign-built phone cost $1299? The specs on the phone are also woeful, with only 3 GB of RAM and 32 GB of storage on the base unit. It appears that the real cost of the phone is the operating system, PureOS, which seems to be a "hardened" AOSP version. They're also offering a phone plan for $99/mo. Is that because the cellular signals are manufactured in the US as well instead of using dirty foreign radio waves?
Not saying that Purism isn't trying to do something good with a privacy-focused phone, but that's a hard sell to the average consumer.
Good!!
I hope this increases the pushback on Microsoft's Windows 11 compatibility bullshit.
Is this madness unbounded...?
...or have I missed some fundamental point?
Back to the future
Tariffs on imports were the rule pretty much globally until near the end of the 20th century when "free trade" and globalisation were spruiked notably by the US which lead to the US signing a number of free trade agreements with the world from which I doubt any party other than the US actually substantially benefited. You don't hear so much about GATT nowadays.
If the legislature permits Trump and fellow travellers to go down this path the serious economic consequences are going to be felt by all Americans.
Unconstrained protectionism is as bad if not worse than laissez faire free trade.
I take it this will make the mid-term elections ---- interesting.