(Photo by Justin Sullivan/Getty Images)
UPDATE 4/9: With price hikes and product delays piling up, President Trump halts "reciprocal tariffs" for most countries for 90 days. For China, however, tariffs are ballooning from an already-eye-popping 104% to 125%.
Original Story:
Worried about tariffs? You’re not alone. President Trump’s "reciprocal tariff" plan threatens to drive up prices, leaving vendors scrambling and consumers bracing for impact.
But should you rush to buy that new gadget now or hold off? The answer is tricky. There are signs that prices could increase within weeks as existing inventory runs out. But many vendors are looking for workarounds, including stocking up on supplies before Trump's reciprocal tariffs take effect on Wednesday.
If you’re looking to buy a PC case or components, then the pain is already here, especially for graphics cards. They are largely made in China, where Trump’s existing 20% tariff on Chinese imports and aluminum have already prompted PC vendors, especially smaller boutique shops, to prepare for price increases.
Reciprocal tariffs on China increase to 54% on April 9, but on Monday, the president threatened to increase that to 104% after China imposed tariffs of its own.
Trump’s reciprocal tariffs also target imports from Vietnam, Taiwan, Malaysia, Cambodia, and India at various rates. And because most electronics manufacturing occurs in Asia, all kinds of products, including smartphones, tablets, and the even Nintendo Switch 2 will be affected.
(Photo by Alex Wong/Getty Images)“We anticipate prices for many electronic devices to increase at some point in the year, as existing inventory is depleted. For some products this could happen within the next month,” says Gerrit Schneemann, an analyst with Counterpoint Research.
PC Gamers Should Buy ASAP
It's unclear how much prices will increase, but the CEO of custom PC desktop vendor Maingear tells PCMag: "We’re exploring ways to mitigate additional costs, but I anticipate PC gamers will see an increase by approximately 20–25%."
AMD notes that Trump’s reciprocal tariffs spare foreign-made semiconductors. But for how long? The president recently warned that chip-focused tariffs will arrive “very soon.”
As a result, PC builders should pounce while they can on desktop CPU deals. But other consumers won’t be so lucky.
Dean McCarron, President of Mercury Research, says that about three quarters of CPU shipments from Intel and AMD end up getting shipped and re-packaged inside computer products manufactured outside the US. "Semiconductors are just components in finished goods, many of which will be subject to tariffs," he says.
Sparing Mexico and Canada Could Spare Your Wallet, Too
Outside of PCs, some products might escape price hikes for now. Trump’s reciprocal tariffs do not target Canada or Mexico, where electronics manufacturing has been growing. "Samsung might see less of an impact, initially, on its TV business because it has production facilities in Mexico—but smartphones are not produced there,” Schneemann says.
(Photo by Jakub Porzycki/NurPhoto via Getty Images)Meanwhile, other vendors, including Apple, are working around the tariffs by shipping a huge volume of product from India to the US before the reciprocal tariffs take effect.
"We do know that many brands have ramped up shipments to the US to try to get ahead of some of the tariffs, especially since Q2 is such an important season for PCs with back-to-school sales," said Ishan Dutt, an analyst for research firm Canalys.
Ryan Reith, an analyst at research firm IDC, also notes that some vendors are looking at shipping and re-packaging their products in countries like Singapore, which is facing only a 10% tariff increase.
Buy Headphones, Cheap Phones and Speakers Now?
It’s also possible that vendors absorb the tariff costs—at least for some products—to avoid alienating customers. That’s easier to pull off if a product has a large margin between its actual cost and final selling price. But entry-level products that sell for thin margins will need price changes to avoid a financial loss.
“So, items like small notebooks, basic PCs, headphones, and Bluetooth speakers are likely to take a bigger hit (in terms of price increases) than items like powerful laptops, high-end gaming machines, noise cancelling headphones, and premium sound systems,” says Ralph McLaughlin, chief economist for OpenBrand, which tracks price changes.
Le Xuan Chiew, another analyst at Canalys, also expects price hikes for more affordable mobile phones due to the thinner margins. "Our internal estimates indicate that approximately 15% of the U.S. smartphone market falls within the sub-$200 price band (for phones)—a segment likely to be most affected by the increased tariffs," he added.
In addition, some vendors might resort to pausing their cheaper models. Upgradable laptop vendor Framework is temporarily discontinuing certain base-model systems. "We priced our laptops when tariffs on imports from Taiwan were 0%. At a 10% tariff, we would have to sell the lowest-end SKUs at a loss," it tells us.
"Other consumer goods makers have performed the same calculations and taken the same actions, though most have not been open about it," Framework adds.
iPhone Panic-Buying? Probably Not
Complicating matters is that Trump’s trade policy is unpredictable. Although China is digging in its heels on tariffs, other countries, including Vietnam and Taiwan, are more eager to cut tariff-exemption deals with Trump.
So, there’s always a chance the escalating trade war could suddenly wind down, leaving a large swath of products free from the US duties. Canalys noted that "approximately 80% of iPhones are produced in China, 16% in India, and 4% in Brazil."
Iin the meantime, the tariffs are expected to depress demand for consumer electronics, save for some panic-buying. "The uncertainty in this new environment means that demand will be dampened in the longer term as buyers second-guess their purchasing decisions when they don’t know what will happen next,” says IDC analyst Bryan Ma.
Schneemann adds: “We have already seen record-low upgrade rates from US carriers and we don't think subscribers are going to rush to buy a new smartphone to avoid potentially higher prices in the future. We think subscribers are more likely to hold on to existing phones for longer.”