“At that point, it’s prohibitive” to do business with China, Brzytwa told Ars, suggesting that Trump’s proposed tariffs are about “blocking imports,” not safeguarding American tech.
How soon would tech prices increase?
It’s unclear how quickly prices would rise if Trump or Harris expanded tariffs.
Lovely told Ars that “it’s really up to the manufacturers, how fast they pass through the prices.” She has spoken to manufacturers using subcontractors in China who “say they’re in no position to move their business” “quickly” to “someplace else.”
Those manufacturers would have a difficult choice to make. They could “raise prices immediately” and “send a very clear signal to their customers” that “this is because of the tariffs,” Lovely said. Or they could keep prices low while scaling back business that could hamper US innovation, as the CTA has repeatedly warned.
“I think I would just say, ‘Hey everybody, you elected this guy, here’s the tariff,'” Lovely said. “But some might decide that that’s not the best thing.”
In particular, some companies may be reluctant to raise prices because they can’t afford triggering a shift in consumer habits, Lovely suggested.
“Demand is not infinitely elastic,” Lovely told Ars. “People will say, ‘I can use my cell phone a little longer than every three years’ or whatever.”
Tech industry strategist and founder of Tirias Research, Jim McGregor, told Ars that if Trump is elected and the tariffs are implemented, impacts could be felt within a few months. At a conference this month, Trump’s proposed China tariffs were a hot topic, and one tech company CEO told McGregor that it’s the global economic X-factor that he’s “most worried about,” McGregor told Ars.
On top of worrying about what tariffs may come, tech companies are still maneuvering in response to Biden’s most recently added tariffs, analysts noted.
In May, McGregor warned in Forbes that Americans will likely soon be feeling the crunch from those tariffs, estimating that in the “short term,” some tariffs “will drive up prices to consumers, especially for consumer electronics, due particularly to the tariffs on chips, batteries, and steel/aluminum.”
Staring down November 5, it appears that most tech companies can’t avoid confronting the hard truth that US protectionist trade policies increasingly isolating China are already financially burdening American consumers and companies—and more costs and price hikes are likely coming.
“It just doesn’t look good,” Brzytwa told Ars.