Trump’s 10% tariff on all imports from China – payable in addition to any existing duties – is now in effect, and is starting to be reflected in US prices.
The tariff is paid by US businesses and consumers when goods arrive from China, with companies forced to choose between passing it on to consumers in the form of higher prices, or absorbing the costs and taking a hit to their profit margin …
The Telegraph (via Engadget) notes that Acer is one of the first companies to announce its decision, choosing to pass on the tariff to customers.
The boss of one of the world’s biggest computer makers has said he is putting prices up by 10pc as a direct result of Donald Trump’s tariffs. Jason Chen, the chief executive and chairman of Acer, said the US price increase on laptops made in China would happen “by default” and apply from next month […]
“We will have to adjust the end user price to reflect the tariff,” Mr Chen said. “We think 10pc probably will be the default price increase because of the import tax. It’s very straightforward.”
During the campaign, Trump claimed that prices would not be affected by the tariff, but following his election admitted that prices “could go up.”
If you’re planning a sizeable purchase of anything made in China, now could be a good time to buy. While the tariffs are now in effect, many companies will still have US stock imported last month which they can sell at existing prices without impacting their bottom-line.
The paper reports that almost 80% of laptops sold in the US are made in China, with the trade body for consumer electronics goods predicting an expensive hit.
The Consumer Technology Association (CTA), the trade body for the electronics industry, has said that tariffs could cost American consumers up to $143bn and lead to a slump in sales.
Apple is a Core Member of the CTA.
Acer says it’s considering moving some production out of China, but the hurdles to doing this are substantial. The company also mentioned the possibility of doing some manufacturing in the US, but that’s likely merely a diplomatic murmuring given that a separate Trump tariff would impose an import tax on components of up to 100%.
Apple has so far left its prices unchanged, but it too will have to choose between raising US prices or accepting a reduced profit margin on US sales.
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