Electronics Hardware Vendor Prepping Customers For Tariff-Based Price Hikes

February 20, 2019 by Dave Haynes

Interesting to get a note just now from an American hardware manufacturer active in digital signage, indicating that its finished goods prices will be going up if US government-imposed tariffs on China take effect, as planned, on March 2nd.

The tariffs, the company says, include a “number of hardware sub-components we use in our computer systems. These 10 percent tariffs are scheduled to increase to 25 percent on March 2, 2019. Should this increase take effect, you are likely to notice an increase in our prices.”

The company goes on to say there is still time to order before price increases go into effect. I assume this is not a message unique to this company, which is why I am not singling it out.

The sub-components of something like a media player will not all be made in China, so when tariffs go up 15% that does not mean total prices should also go up correspondingly. The affected parts may only represent, let’s say, 30% of the build and cost.

I’ve spoken with US-based LED manufacturers, for example, who say the impact is not that substantial, and noted work-arounds like getting components from companies in countries like Taiwan and South Korea.

Opinions vary particularly among political partisans, but the prevailing wisdom is that these sorts of tariffs are not much more than a border tax that doesn’t materially affect China, but does raise prices for end-users. In other words, most economists regard the tariffs as stupid.

Are you affected as a vendor or buyer?