Make This Christmas An Electronic Christmas
While that statement might read like an ad slogan for several PC manufacturers, companies that assemble electronics in the USA, like TV manufacturers or even smartphone companies gearing up new products to comply with the much anticipated 5G networks, the truth is, this just might be the best time.
That’s right, this Christmas might really be the best time to purchase that gaming PC you always wanted or that Business Laptop you have to have– just about anything that contains circuit boards or the precious metals needed to make some of our electronics. “Why”, you might ask. The answer is Tariffs.
Unrealistic Tariff Increase?
According to the Website of the Office of the United States Trade Representative (USTR) (Executive Office of the President), the USTR has finalized tariffs on $200 Billion of Chinese imports. Starting next week, affected goods will face a 10% tax upon entering the country and rising to 25% by the end of the year.
According to several news outlets, most major manufacturers like Dell, HP/ Apple, and others, might initially have the ability to absorb some of the increased costs associated with the new tariffs. Several are already stockpiling parts and supplies at pre-tariff prices, but sooner or later the price will hit us, the consumers.
Small companies don’t usually work on a 10% profit margin let alone 25%. There is really no place to absorb the price increase. In a public letter to US trade authorities, Cyberpower, a manufacturer of gaming PCs said, “In our company’s 20-year history, the proposed Section 301 Tariff Action is the greatest threat to our company’s survivability to ever arise.”
In another example, a start-up company, Brilliant Homes, a manufacturer of smart home controls that give homeowners, touch and voice control over all their smart devices, was blindsided by the new tariff. According to The Verge they were planning on delivering 1000 pre-orders at $149 then afterward, the price would be $199- $249. A quick check on the Brilliant Homes website shows the starting price at $299 and $399– a direct connection to the increased tariffs. Their CEO, Aaron Emigh, stated, “Tariffs are a death wish on American start-ups.”
This Is Not A Political Article
Obviously, these tariffs affect more than electronics– even Jim Beam and Jack Daniels have vowed increases to cover the cost of the tariffs, but that is not within the scope of this article. If you really are interested in other things listed under this tariff, the entire 194-page final release can be read in this Tariff List PDF file. Regardless of your political position, or if you are happy or hate the President’s decision to start these new taxes, the truth is that electronic prices will be affected.
Look at it this way– if you were planning on buying that once-in-a-lifetime $3000 gaming machine, that same machine will probably be $3750 or more next Christmas.
My view is, if the big guys can pre-buy so can I and that is why I plan on getting that new Fitbit now instead of next week.
Summary
As I said, I truly do not mean to inflict my political views on a tech site. Right now, I am still trying to learn if the tariffs are a good or bad thing for this country. My only goal with this article is that if you were thinking of buying something down the road, now might be better because next year, to paraphrase James Brown, “Santa’s got a brand new bag.” Just as I was ready to submit this article, I see that China has decided to extend the time for the 25% tariff but sadly, only for vehicles.
—
