Donald Trump’s China tariffs could increase TV and battery prices by 23 per cent, study finds

Computer monitors and printer ink and cartridges could also go up; an expert said that shifting manufacturing to low-cost countries such as Vietnam and Thailand may not work in the short term because they don’t have enough capacity

PUBLISHED : Wednesday, 18 April, 2018, 1:38am
UPDATED : Wednesday, 18 April, 2018, 2:56am

American shoppers would pay about 23 per cent more for TVs, computer monitors, batteries and printer ink and cartridges made in China if US President Donald Trump follows through on tariffs he has threatened to impose on a broad range of technology imports from there, a US industry study has found.

That increase is substantially more than the 10 per cent to 15 per cent price increase previously estimated by analysts and economists. It was calculated by Trade Partnership Worldwide, a consulting firm, for the Consumer Technology Association (CTA) and the National Retail Federation (NRF).

What’s more, prices of all TVs would rise by 4 per cent as retailers spread their added costs to other models, the study says.

“These proposed tariffs are bad for businesses, American consumers and the economy,” said Gary Shapiro, chief executive officer of the CTA.

Said Matthew Shay, his counterpart at the NRF, “China’s unfair trade practises must be addressed, but as this study shows, tariffs aren’t the answer and will punish US consumers in the form of higher prices.”

The US and China have been involved in a series of escalating tariff threats. The tariffs that have been threatened total US$250 billion of trade.

The two countries have agreed to negotiate on issues such as the US$370 billion US trade deficit with China to try to stave off the penalties.

About 47 per cent of all TVs sold in the US are imported from China, as are 83 per cent of PC monitors and 34 per cent of lithium batteries, according to the CTA. 

Those products and printer ink and cartridges represent just a small portion of the 1,300 tech-related imports from China the Trump administration has targeted with tariffs.

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Wholesalers and retailers would pass along to shoppers almost all of the 25 per cent duty Trump has threatened because the inexpensive products made in China have low profit margins, Trade Partnership President Laura Baughman said. 

She added that manufacturers would not be able to shift production to low-cost countries such as Vietnam and Thailand in the short term because those nations don’t have enough capacity.

“You really can’t get the TVs from somewhere else,” Baughman says.

The price of a US$250 TV made in China would rise 23 per cent to US$308 after the tariffs, according to the CTA and NRF. Also, TV prices broadly would increase 4.1 per cent as retailers offset some of their added costs by raising prices of other models, Baughman said. 

In total, shoppers would pay an additional US$711 million a year for TVs and cut back their total purchases by 7.8 per cent, the study found.

Prices of PC monitors from China would increase 23.5 per cent, and monitor prices overall would rise 2.8 per cent. Battery prices would increase 23.8 per cent and battery prices broadly would edge up 0.8 per cent. 

Printer ink and cartridge prices would jump 22.7 per cent and overall product prices would rise 4.1 per cent. Daniel Ives, chief strategy officer and head of technology research at GBH Insights, said some retail prices on Chinese technology imports may rise 23 per cent, but others could increase 5 per cent to 10 per cent as wholesalers and retailers absorb much of the added cost.