Undoubtedly, you have heard that President Donald Trump plans to impose significant tariffs on goods manufactured outside of the United States and imported for sale into the United States. While he has targeted many countries in his plans, not all countries will fare the same. From everything we have heard, Trump plans to impose tariffs on goods from China. While all tariffs have the potential for economic impact that may affect you personally or professionally, we will focus on China due to its connections to the electronics industry.
In this article, we will not speculate about the impact of the proposed tariff structure on the U.S. economy, the economy of the targeted countries, or the world economy. We encourage you to read about those projections.
Now, we get to the seminal point of this article. Many goods sold in this country come here from China. China manufactures or assembles a wide variety of goods, particularly in technology. Many American companies sell goods in this country that are manufactured or assembled in China. Those goods will likely fall under any tariff scheme imposed during the Trump administration. As China produces or assembles a substantial quantity of electronics items, we anticipate this will be an area significantly impacted by the Trump tariffs.
In a recent article published online by CBS News, author Magnum Cerullo notes:
The tariffs would also reduce American consumers’ spending power by $90 billion on products including TVs, headphones, laptops and tablets, video game consoles, smartphones and other electronics, according to the Consumer Technology Association.
The trade group—which modeled the impact of a 10% tariff on Chinese imports, coupled with a 60% levy on goods from the country that Trump previously floated—estimated that laptops and tablets would see the steepest price hikes, with costs surging as much as 45%. Video game consoles and smartphones could also see double-digit gains.
Researchers assumed retailers would pass all added costs related to tariffs along to consumers. In the smartphone category, the average increase in price would be $213 per device, according to CTA.
“The likelihood of retailers or any importer absorbing the tariff cost is very low, so the pass through to consumers will be quick,” said Ed Brzytwa, vice president of international trade at CTA. “On all the products we looked at, there are going to be price increases.”
Cerullo’s article talks about the fact that many clothing items, particularly footwear, also come from China. We will not focus on anything but electronics in this article, but you should take note of the clothing and other consumer goods that will come under the tariff scheme. The same principles apply to those items, so take similar action as we recommend here for electronics.
As the timing of applying the tariff structure remains unclear, and it has not been established that Trump will successfully impose a tariff scheme, we acknowledge that our concerns remain speculative. As with all speculative things, you can take your chances one way or another. If you believe, as we do, that the odds favor the imposition of a tariff scheme, then you will follow our recommendation to determine your electronics needs for the immediate future and advance your acquisition of those goods to stay ahead of the economic impact of the anticipated tariffs.
Tip 1. Assess Your Electronics Needs
If you already plan to acquire new electronics (cell phones, tablets, laptop computers, desktop computers, monitors, etc.), put them on a list. Next, determine your anticipated situation for the next two years and decide what additional electronics you will need (or desire). Add them to the list. You have now created your shopping list. Don’t plan out more than two or three years, as the farther you go into the future, the more likely your planning will incorporate errors. Remember that technology will continue to advance, tariffs notwithstanding. You don’t want to buy too much too soon, or you will not enjoy the benefits of many of those advances.
Tip 2. Identify the Goods You Want
Not all electronics are created equal. You already know that many manufacturers generate numerous electronic device models matching each category on your shopping list. For example, if you have a cell phone on your shopping list, do you want an iPhone or an Android device? If you want an Android device, do you want one manufactured by Samsung, Google, OnePlus, Xiaomi, Huawei Technologies, Sony, or one of the other Android phone manufacturers? Most, if not all, manufacturers offer multiple models, so you will need to choose the one you want.
