Thu, 13 Mar 2025

Thu, 13 Mar 2025 US tech firms feel pinch from China tariffs

The price of China-made smartphones, TVs and laptops could rise in the US and elsewhere, experts warn.
US Businesses Hit Hard by New Tariffs President Donald Trump's new trade policies have put many US businesses, especially those in the tech industry, at risk of bankruptcy. The tariffs imposed on Chinese imports, including electronics and video games consoles, are causing companies to absorb huge costs or pass them on to consumers.
* Austere, a California-based firm that supplies high-end audio and video accessories, had to pay a 25% surcharge on every imported cable and component after Trump's first term. The company thought it would go bust but managed to pull through.
* New tariffs have been imposed on all goods imported from China by 20%, and taxes of 25% on Canadian and Mexican products. This will affect many US businesses that rely heavily on imports, including electronics retailers and manufacturers.
* Goods like smartphones, desktop computers, and tablets are now incurring tariffs for the first time, while others have seen their taxes climb higher. Impact on Businesses and Consumers
* US importers have to pay these taxes, not the exporters. This means American businesses and consumers will suffer as prices rise.
* Companies like Austere that rely heavily on Chinese imports are particularly exposed. China is still the number one supplier of electronic products to the US.
* While some companies have diversified their supply chains away from China, countries like Thailand, Taiwan, and Vietnam do not offer the same manufacturing capabilities and expertise. Potential Consequences
* Research suggests that companies pass on a large proportion of the costs of tariffs by putting up prices. This could lead to higher prices for consumers.
* The US president's new trade policies may drive up the price of tech goods around the world if China is forced to relocate manufacturing to countries with higher labor costs.
* Countries may hit back with tariffs on imported US technology, further escalating tensions. Business Owners' Concerns
* Austere's owner, Deena Ghazarian, says she may have to raise her prices this year but worries it could backfire. She hopes that bulk-ordered inventory will get the company through the next year until it can "pivot" again.
* Other business owners are also concerned about the impact of tariffs on their companies and customers.
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