U.S. trade war hits consumers with higher electronics pricing

A 15 per cent tariff on Chinese goods came into effect on Sunday, Sept. 1st. As part of the ongoing trade war between the U.S. and China, the new tariff could significantly drive up the cost of electronics for consumers.

While TVs, phones, and audio gear are just a subset of the long list of affected items, they have a wide-reaching effect. The tariff not only affects Chinese brands, but many electronics manufactured in China.

This means that many electronics companies including Apple, TCL, and others with productions in China would feel the blunt end. Apple’s wireless Air Pods are the company’s major focus. In addition, its Beats wireless headphones is a major subsidiary. Many other Chinese companies sell their products to distributors like Walmart and BestBuy.

Other affected items include monitors, smartwatches, printers, and many more.

Because of Canada’s economic ties with the U.S., drastic pricing increase could affect Canadian customers as well.

It won’t be until the holiday seasons before the tariff’s effect fully manifests. Businesses are likely to delegate the cost overhead onto the buyers, although some sellers have said that they’re willing to cut margins to avoid affecting consumer pricing.

Thus far, the U.S. has applied heavy taxes on over $300 billion worth of Chinese goods. China has retaliated in kind, placing 25 per cent tariffs on U.S. imports like Soy.

The initial import tax rate was set at 10 per cent in November 2018. It was increased to 15 percent on August 20, 2019 by U.S. President Donald Trump. Affected items are listed in the U.S. Federal Register.

IT Business has reached out to Apple and TCL for comments and will update the article when it hears a response.

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Jim Love, Chief Content Officer, IT World Canada

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Tom Li
Tom Li
Telecommunication and consumer hardware are Tom's main beats at IT Business. He loves to talk about Canada's network infrastructure, semiconductor products, and of course, anything hot and new in the consumer technology space. You'll also occasionally see his name appended to articles on cloud, security, and SaaS-related news. If you're ever up for a lengthy discussion about the nuances of each of the above sectors or have an upcoming product that people will love, feel free to drop him a line at [email protected].

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