CTA warns of tariff-fueled price hikes on consumer tech – but it's not all bad news

Got your eye on a new laptop, smartphone, TV, or gaming console? Be prepared to shell out more money if and when you decide to buy it. A new report released this week by the Consumer Technology Association describes how the Trump tariffs could dramatically bump up the cost of your favorite electronic products.

Based on analysis from the Trade Partnership Worldwide (TPW), an international trade and economic consulting firm, the latest report follows one released in January. Back then, Trump was advancing tariffs only as a threat and a bargaining ploy. Since then, the situation has changed into an on-again, off-again mishmash with uncertainty over if, when, where, and how certain tariffs may be implemented or retained.

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Despite the Trump administration’s claims to the contrary, tariffs are essentially added taxes on goods paid for by the consumer. The higher cost of products can not only affect your own wallet and spending habits but also impact the overall economy. The CTA itself has been vocal in its opposition to such tariffs, arguing that they can affect product affordability and reduce US consumer spending by $123 billion per year.

The intent of tariffs is to shift the manufacturing and production of electronic goods from other countries to the US. That may sound like a worthy goal, but it’s much easier said than done. Many overseas factories and suppliers build the individual components that make up an entire product. Moving all such facilities and production to the US could take decades and may result in even higher prices.

To gauge the possible impact of the tariffs, the report itself looks at a variety of devices and gadgets, including smartphones, laptops and tablets, desktop computers, monitors, printers, computer accessories, video game consoles, TVs, and even lithium-ion batteries. Though there’s cause for alarm, the report delivers both good and bad news.

First, the good news. The projected price increases are based on a variety of factors coming together.

Currently, there’s a 90-day pause on tariffs for smartphones, laptops, and other consumer electronics. For the price increases to take effect, such tariffs would have to be reinstated on all eligible products. But the Trump administration seems to have indicated that the pause is temporary, so we could easily see these return in the near future.

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Further, other tariffs would have to remain in place. These include a 20% tariff on China on top of the 125% tariff and a 25% tariff on products that aren’t duty-free under an agreement among the US, Mexico, and Canada. With the Trump administration seemingly changing direction every other day, we don’t know yet how this will all play out. Still, there is some hope that savvier negotiators may prevail, at least eventually.

Now, for the bad news, namely, the possible cost increases themselves. Based on TPW’s analysis, smartphone prices could rise by 31%, or $255 on average. The average cost of a laptop or tablet may jump by 34% ($269 for laptops; $152 for tablets). Buying a desktop PC could cost you an extra $287, or 24%. And the price of a TV may increase by 11%, or $57.

Saving the worse for last, the average cost of a video game console could skyrocket by 69%, or $428. We’re already seeing price increases in this market. In early May, Microsoft raised the price of its Xbox console and accessories in the US and other countries. The company didn’t blame potential tariffs for the higher prices, instead citing “market conditions and the rising cost of development.” But with prices already higher, the tariffs would only make things worse.

Beyond the direct impact on consumer products, the tariffs could also affect the cost of semiconductors and other items in the supply chain, including copper, lumber, and certain minerals. The Trump administration has already proposed a 25% tariff on such components.

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“US consumer technology companies understand the challenges these tariffs pose, having already faced significant pressure under earlier Section 301 tariffs,” the CTA said in the report. “Importers understand that tariffs are paid by US firms and ultimately raise the cost of imported goods, negatively affecting both the economy and consumers. The proposed measures would substantially increase costs for a broad range of consumer technology products sold in the United States.”

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