Tariffs seen cutting US sales, upgrades of consumer tech goods

June 25, 2019 09:12
Tariffs on China-made goods will raise the prices for US consumers, prompting people to cancel or delay plans to upgrade their gadgets such as cellphones and computers, American industry executives warn. Photo: Reuters

US consumers will delay or forgo technology upgrades if President Donald Trump imposes a new round of 25 percent tariffs on Chinese goods, technology industry executives warned on Monday, Reuters reports.

Sage Chandler, vice president of international trade for the Consumer Technology Association, told a hearing hosted by the US Trade Representative’s office that imposing the tariffs would raise the retail price of cellphones by an average of US$70, the report said.

Among other consumer tech products, the price of laptop computers would rise by US$120 on average and that of video game consoles by US$56, Chandler was quoted as saying.

“A lot of consumers will look at that and say: ‘I’ll just wait for the next generation.’ That’s a lot of money for the average consumer,” the executive told Reuters.

Chandler, whose association represents major tech groups including Apple, Facebook, Google and Intel, told the hearing the proposed tariffs will extend a ripple effect that would spread through the US economy.

“Because technology is now the backbone of so many other industries - from agriculture to manufacturing - taxes on technology hit far beyond the technology industry,” he said.

The comments came as the Trump administration is preparing to levy tariffs on an additional US$300 billion worth of Chinese imports after a public comment period ends on July 2 if the US and Chinese presidents cannot relaunch talks to end their trade war.

Consumer technology products, including cellphones, laptop and tablet computers, smart speakers and video gaming consoles, would make up US$167 billion of that US$300 billion total, or more than half the target list, according to Chandler.

Win Cramer, founder and chief executive of JLab Audio, a California-based maker of Bluetooth wireless headphones, said he added eight employees after the company’s products were spared from the previous round of tariffs.

But Cramer said he may have to lay off some of those people, as a 25 percent tariff would shrink sales.

“The proposed tariffs on products that make up 80 percent of our business would be catastrophic. We would be forced to lay off employees and raise prices to consumers,” he said. “The factory jobs that build our products never existed in America.”

-- Contact us at [email protected]