The holiday season may be over, but with the Super Bowl quickly approaching, many Americans are likely as focused as ever on acquiring the newest gadgets.
Unfortunately, many popular electronics are about to become significantly more expensive for anyone shopping in the United States.
Breaking: 12 things to know about Trump’s new tariffs
That doesn’t just mean the slight price increase companies implemented during high inflation. On the contrary, predictive studies are showing that the costs of many devices, such as laptop computers, mobile phones, and video game consoles, are likely to almost double in some cases. At the same time, prices for accessories for all such devices are expected to rise.
Things are already complicated for U.S. consumers as the prices of eggs and agricultural products continue to rise. Now, it seems that Americans are about to have to pay more for food and entertainment when economic conditions are already highly uncertain.
Get ready to pay more for your next phone or laptop
Less than two weeks into his presidency, Donald Trump has wasted no time reverting to his former policy playbook. In keeping with expensive campaign promises, he is gearing up to base his economic policy agenda around something he has favored for years: tariffs.
Over the past few days, trade war talk has been heating up as industries prepare for the impact of Trump’s tariffs, taxes that companies are forced to pay to import goods produced internationally.
Related: Where tariffs will hit your budget the hardest
“He signed orders on Saturday that impose 25% tariffs on goods imported from Canada and Mexico and a new 10% tariff on goods imported from China,” reports TheStreet’s Charley Blaine, who adds that for now, the tariffs are only aimed at these three nations.
The trade war is developing quickly.
Monday brought reports that Trump had reached an agreement with Mexican president Claudia Sheinbaum Pardo to pause the tariffs aimed at her nation.
But that doesn’t change the fact that Trump’s tariffs, particularly those against China, are poised to send electronics prices surging. According to a study from the Consumer Technology Association, laptop prices could rise by as much as 45%, while video game consoles may surge by 40% and smartphones by 26%.
In October, the Consumer Technology Association published data on how Trump's tariffs will increase the cost of technology products.
* Laptops and tablets by 46%
* Video game consoles by 40%
* Smartphones by 26%Tariffs WON'T increase U.S. production of these… pic.twitter.com/nzpx7K2xA4
— Bambooshooti™ 🇺🇸🥁🌊😷💉🌻 (@bambooshooti) December 10, 2024
Just how dependent are U.S. electronics producers on China? According to the CTA, the answer is highly.
The trade group’s data shows that China is responsible for the bulk of the U.S. market’s electronics imports, accounting for “78% of production of smartphones, 87% of video game consoles and 79% of laptops.”
Cassandra Cummings, CEO of electronics manufacturer Thomas Instrumentation, provided further context on rising costs, noting that China and Mexico are leading manufacturers of many important tech components, including integrated circuits (chips), bare printed circuit boards (PCBs), and connectors.
“Tariffs on those nations will increase the prices of these components and force US electronics manufacturers like ourselves to either cut into our profit margins or raise prices,” she predicts.
Despite some claims to the contrary, many experts argue that the rising cost of electronics will burden the consumer, not the company selling them.
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“Consumer electronics typically have very small margins. As a result, higher costs cannot be absorbed by retailers or other companies in the value chain and must be passed on to consumers,” notes IPC chief economist Shawn DuBravac.
Buckle up: the economic consequences of the trade war are just beginning
When Trump’s tariffs take effect, electronics won’t be the only consumer staple that becomes more expensive. TheStreet’s Patricia Battle recently reported that Procter & Gamble (PG) , the owner of brands such as Bounty, Tide, and Dawn, is considering raising prices to help offset the impact of the tariffs.
Related: A fierce technology battle erupts within Donald Trump’s fanbase
If an industry leader such as P&G opts to raise prices, many other companies are likely to do the same. Wall Street veteran Peter Tchir predicts that gas prices are about to rise and that the surge will be quick, stating:
“The most immediate impact will be felt at the pump on the Atlantic coast. While the U.S. is a net exporter of gasoline, the country exports a lot from the Southern states and imports a lot into New York for use on the Atlantic.”
Many experts agree that these tariffs will lead to surging prices across many industries as companies fight to offset the high costs. But for the consumers who buy their already expensive products, things may be about to get significantly more complicated.
Anyone planning to purchase a new laptop, smartphone, or gaming console in 2025 may face a difficult choice.
Related: Veteran fund manager issues dire S&P 500 warning for 2025
