U.S. tariffs on Chinese technology would slam consumers, study says
American shoppers would pay about 23% more for TVs, computer monitors, batteries and printer ink and cartridges made in China if President Trump follows through on a tariff he has threatened to impose on a broad range of technology imports from that country, according to an industry study.
That increase is substantially more than the 10% to 15% price hike previously estimated by analysts and economists. It was calculated by Trade Partnership Worldwide, a consulting firm, for the Consumer Technology Association (CTA) and the National Retail Federation (NRF).
What’s more, prices of all TVs would rise by 4% as retailers spread their added costs to other models, the study says.
“These proposed tariffs are bad for businesses, American consumers and the economy,” says Gary Shapiro, CEO of the CTA.
“China’s unfair trade practices must be addressed, but as this study shows, tariffs aren’t the answer and will punish U.S. consumers in the form of higher prices,” NRF CEO Matthew Shay says.
In response to the tariffs the administration has threatened to slap on $50 billion in Chinese imports, China has said it would place 25% duties on $50 billion in U.S. shipments to the country. The two countries have agreed to negotiate on issues such as the $370 billion U.S. trade deficit with China to try to stave off the penalties.
About 47% of all TVs sold in the U.S. are imported from China, as are 83% of PC monitors and 34% of lithium batteries, according to the CTA. Those products and printer ink and cartridges represent just a small portion of the 1,300 tech-related imports from China the Trump administration has targeted with tariffs.
Wholesalers and retailers would pass along to shoppers almost all of the 25% duty Trump has threatened because the inexpensive products made in China have low profit margins, Trade Partnership President Laura Baughman says. Also, she says, manufacturers would not be able to shift production to low-cost countries such as Vietnam and Thailand in the short term because those nations don’t have enough capacity.
“You really can’t get the TVs from somewhere else,” Baughman says.
The price of a $250 TV made in China would rise 23% to $308 after the tariffs, according to the CTA and NRF. Also, TV prices broadly would increase 4.1% as retailers offset some of their added costs by raising prices of other models, Baughman says. In total, shoppers would pay an additional $711 million a year for TVs and cut back their total purchases by 7.8%, the study says.
There would be similar effects for other products, the study says:
Monitors: Prices of PC monitors from China would increase 23.5%, and monitor prices overall would rise 2.8%.
Batteries: Battery prices would increase 23.8% and battery prices broadly would edge up 0.8%.
Printer supplies: Printer ink and cartridge prices would jump 22.7% and overall product prices would rise 4.1%.
Daniel Ives, chief strategy officer and head of technology research at GBH Insights, says some retail prices on Chinese technology imports may rise 23%, but others could increase 5% to 10% as wholesalers and retailers absorb much of the added cost.
President Trump has proposed a 25% tariff on $50 billion worth of Chinese goods.