Tech Purchases from China and the New Trade Tariffs

How will the trade war with China impact our tech purchases?

Last Friday, when the President announced new trade tariffs with China, and then when the stock market tanked two days in a row, I got a little concerned about the impact those tariffs might have on technology and the average consumer.  I’ve spent the weekend reading the news and mentally processing what this might mean to our tech purchases.

One thing that struck me was the mania that has been attached to this story.  The hyped up media isn’t helping us keep a clear head so that we can approach the impact of this news with clarity.  I’m looking for more clarity about this story and am finding clear thinking in the finance news.Tech Purchases - Made in China

When I talked with Chris Eddy about this, he indicated that paying more attention to intellectual property would be a good thing.  But how will that impact our tech purchases?

On the Market Watch website, they are pretty optimistic that the tariffs will not have a negative effect for these three reasons:

“Here are the three trade numbers that show that a trade war is less likely.

• In 2017, the U.S. imported $506 billion worth of goods from China.

• Trump is talking about tariffs on only a small fraction in the range of $50 billion-$60 billion.

• China’s response is very weak. In a tit-for-tat, China would have proposed duties on U.S. goods worth around the same amount. Instead, China is proposing duties on $3 billion worth of goods.”

So, just in terms of raw numbers, the impact of the tariffs is fairly small. The tariffs will apply to less than 12% of all imports. On the Investopedia website they name some of the sectors which will be targeted:

Trump’s tariffs on China are expected to target aeronautics, modern rail, new energy vehicles and high-tech products. … Tech hardware and machinery are among the largest U.S. import categories, and, in our view, are at risk,”

In looking through all the news stories, I tried to find someone (anyone!) who would tell me how this might impact the average consumer and their tech purchases.  USA Today has projected small increases in consumer goods:

“Amazon, which buys in bulk and operates on thin margins, could pass along only a 1% or 2% higher price to consumers, says Daniel Ives, chief strategy officer and head of technology research at GBH Insights.

Similarly, tariffs on imported parts such as semiconductors might raise the price of a laptop by only about 3%, Hufbauer says.

Other retailers could be affected as well, depending on the final list of 1,300 products that the U.S. has said it will target.

“A family of four will end up paying about $500 more to buy (clothing, shoes, fashion accessories and travel goods) every year” if those products are subject to 25% tariffs, the American Apparel and Footwear Association says.”

So, we could see a small increase on tech items of 3% or so.  Unfortunately the adage of “Buy American” doesn’t work so well with technology since so much of it is manufactured in Asia.

For additional reading, check out these articles and opinion pieces:

In the meantime, we’ll continue to help you keep your technology good to go, so that you can spread out those new tech purchases!

Chris Eddy of Geek For Hire, Inc. has been providing computer service to families and small businesses with Mac’s and PC’s for the past fifteen years. His company is highly rated by both the BBB (Better Business Bureau) and by Angie’s List. You can find more on our website, or give us a call 303-618-0154. Geek For Hire, Inc. provides onsite service (Tier 3) to the Denver / Boulder / Front Range area as well as remote service throughout North America.

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