The Consumer Technology Association (CTA) has raised alarms over the potential impact of former President Donald Trump’s proposed import tariffs on American consumers. The CTA, which represents the U.S. tech sector, including the CES conference, analyzed two possible tariff scenarios and found that tech prices could increase dramatically, reducing consumers’ purchasing power and affecting demand for popular electronics.
Potential Price Hikes Under Proposed Tariffs
According to the CTA’s findings, Trump’s tariff plans could cause a surge in the cost of several tech products. In the first scenario, which suggests a 10% global import tariff and an additional 60% tariff on Chinese imports, U.S. consumers could see laptop and tablet prices rise by 45%, gaming consoles by 40%, monitors by 31%, and smartphones by 26%. In a more severe second scenario, where global tariffs are increased to 20% with a 100% tariff on Chinese imports, prices could escalate even further: laptops and tablets could become 68% more expensive, gaming consoles could rise by 58%, monitors by 48%, and smartphones by 40%.
These price increases would not only strain consumer budgets but could also reduce tech product sales. The CTA estimates that the tariffs could result in a loss of up to $143 billion in consumer spending annually.
Impact on Consumer Demand and the Tech Industry
The CTA report highlights the significant economic consequences of such tariffs, particularly the likely reduction in consumer demand. It predicts that sales could plunge as much as 68% for laptops and tablets, 58% for gaming consoles, and 37% for smartphones due to the steep price hikes.
While Trump has argued that the tariffs will incentivize companies to relocate manufacturing to the U.S., the CTA questions whether this will happen. The report suggests that companies may simply shift production to countries with lower tariffs, such as Vietnam or Thailand, rather than bring manufacturing back to the U.S. Even if some manufacturing returns to American soil, the industry would still rely heavily on Chinese suppliers for critical components like lithium-ion batteries and processors.
Trump’s Tariff Strategy and Global Repercussions
Trump, who is set to return to office in January 2025, has been vocal about his tariff policies, using them as a tool to address trade imbalances and issues such as illegal immigration. He has also proposed a 25% tariff on all goods from Canada and Mexico and a 10% tariff on imports from China.
However, the proposed tariffs have sparked concerns about retaliatory measures from trading partners. Canada has already indicated it would impose counter-tariffs, and Mexico has warned that the tariffs could cost the U.S. up to 400,000 jobs and increase vehicle prices by $3,000 or more.
Despite suggestions that Trump might scale back his tariff proposals, he denied the reports, calling them “Fake News” and reaffirming his commitment to tariffs.
Implications for U.S. Tech Companies and Consumers
The tariffs could dramatically alter the U.S. tech landscape. Stephen Minton, an analyst at IDC, highlighted that nearly 90% of the global PC market is still manufactured in China, making it especially vulnerable to price hikes under the proposed tariffs. Major U.S. companies like Apple, HP, and Dell still rely heavily on Chinese production, although some have started shifting manufacturing to countries like Vietnam, Thailand, and India.
If these tariffs are implemented, the cost of PCs is expected to rise, potentially leading businesses to delay upgrades or cut back on purchases. This would be particularly true in lower-end markets, where there is little margin to absorb the higher costs.
Industry’s Concerns and Future Outlook
Despite the uncertainty around tariffs, the CTA forecasts a 3.2% growth in the U.S. consumer tech industry for 2025, with revenue reaching $537 billion. However, this growth projection could be affected if tariffs disrupt supply chains and dampen consumer demand.
Greg Davis, an analyst at Canalys, noted that commercial demand for PCs and tablets remained strong in 2024, driven by businesses upgrading to Windows 11. But he warned that tariffs could still have a “noticeable impact” on the market, affecting both consumer and business spending.
Calls for a More Supportive Trade Policy
As the tariff debate intensifies, industry leaders are urging the incoming administration to reconsider broad tariffs and focus on policies that foster innovation and support U.S. competitiveness.
“The incoming administration must address how tariffs impact American businesses and consumers,” said CTA Vice President Ed Brzytwa. “Retaliation from our trading partners raises costs, disrupts supply chains, and harms the competitiveness of U.S. industries.”
