Trump’s tariffs will hit players harder than we thought

The PS5 Pro is an expensive device at $699. Imagine a world where it costs $1,100. These types of prices on consumer electronics may soon become a reality thanks to incoming President Donald Trump and his proposed tariff plans.

Trump will soon become president It is believed that the tariff “It is the most beautiful word in the dictionary.” As one of his first official actions, Trump is expected to impose tariffs on imports into the United States and huge tariffs on goods coming from China. The vast majority of electronics America consumes are made in China. When the tariff is implemented, the price of everything players love will rise. and More than we initially thought.

The Consumer Technology Association took some time out of its busy week at CES to post New report About Trump’s tariffs and the impact you think they will have on electronics prices. It’s a grim study of the worst-case scenario, but it also builds on the policy proposals floating around D.C. right now.

The new CTA report delves deeper into what Trump is expected to do and how he could change the electronics market. There are two proposals circling the capital at the moment. The first is a blanket 10% tariff ring and an additional 60% fixed tariff on all imports from China, which the FTA calls a “10%/70% scenario.” The second is more cruel. The stamp will be 20% on all imports and an additional 100% on anything from China. This terrifying world is the “20%/120% scenario.”

The goal is to punish China and incentivize companies to move manufacturing to the United States to avoid high tariff costs. In effect, companies will pass the costs on to the consumer. Manufacturing and supply chains are complex. Everything needed to produce a PS5 Pro can’t be built overnight. It will take decades of building and change for companies to move their manufacturing outside of China. Meanwhile, Americans will pay the costs to offset the exorbitant tariff rates.

There are early reports that companies like Microsoft, HP, and Dell are doing this Storage of electronic components He pushed manufacturing out of China in anticipation of a Trump presidency. NVIDIA and AMD, which just announced new GPUs, are rushing to ship as many of them as possible to the US Before Trump took office on January 20. The RTX 5090 is already a $2,000 graphics card. This price may rise by some amount 40% percentup to $2,500, if some of the tariffs proposed by Trump are implemented.

“The proposals would raise average US tariffs on imports from all countries, except China, from about 1% to 21%, and on imports from China from 11% to 131%, assuming current trade levels and patterns,” the CTA report said. He said.

The report reviews a list of large consumer electronics items, including laptops, gaming consoles, headphones and smartphones, and presents numbers on what the two different scenarios would do to prices. The report said: “The proposed tariffs on these ten products alone would reduce the purchasing power of American consumers by $90 billion to $143 billion annually.”

Laptops and video game consoles will be the hardest hit because China is the main supplier of both and there are not many alternatives. “For example, in 2023, China accounted for 87% of US video game console imports, 78% of US smartphone imports, 79% of US laptop and tablet imports, and two-thirds of US monitor imports,” the report said. .

During his previous administration, tech lobbyists convinced Trump to give them a waiver on electronics tariffs. It’s hard to know if they’ll be able to pull off the same feat this time, but the news that AMD and NVIDIA are stockpiling GPUs and the fact that major tech companies are already shifting manufacturing offshore is a grim omen.

For the CTA, this is all just a game by the US government to boost its revenues. One that will cost consumers big time. “These proposals are, in essence, tools for the US government to extract as much tax revenue as possible from the American people. We have seen this movie before and we know how it ends.” The proposed tariffs will not create more jobs or manufacturing in the United States. In fact, the opposite may occur as our productivity declines and we may lose jobs over time when workers and businesses have access to technology at a lower cost,” said Gary Shapiro, CEO of CTA and Ed Brisetois, vice president of international trade at CTA, in the report.

Trump spent a lot of taxpayer money during his presidency and increased the national debt by $8 trillion. He also reduced taxes on high-income earners. Harsh tariffs, which would hit players hard, would be one way his presidency could raise revenue for itself without passing tougher tax laws.