Free Trade

Next Round of Tariffs Will Be $1 Billion Tax Increase on Smartphones, TVs, Tablets, and More

Thanks to the trade war, Americans are already importing fewer laptops, speakers, and other electronic items—and paying a higher price for the items they do buy. A bigger hit is coming.

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From headphones to smartphones, from printers to speakers, the next round of tariffs on Chinese-made products is likely to be a $1 billion tax increase on consumer electronics.

President Donald Trump's earlier rounds of tariffs mostly avoided hitting consumer products and electronics—though the focus on manufacturing inputs meant some American tech firms got hit anyway if they import component parts from China, as many do. The next round of 10 percent tariffs, which Trump says will take effect on September 1, will hit almost all remaining un-tariffed imports from China.

That means personal and home electronics won't be spared much longer.

"Tariffs are taxes—and increasing costs on companies puts consumers in the middle of President Trump's trade war," says Gary Shapiro, president and CEO of the Consumer Technology Association (CTA).

According to an analysis from the CTA and the Trade Partnership, a pro-trade policy organization, the next round of tariffs will hike the taxes Americans pay on consumer electronics by about $1 billion per month.

That's on top of the costs American tech companies are already facing. According to CTA, the industry paid $1.7 billion in tariffs in June of this year. That's eight times more than was paid in June 2018, despite the fact that consumer electronic imports from China had declined by 39 percent year over year. Trump imposed then first round of tariffs on Chinese imports in July of last year.

In short, Americans are importing fewer laptops, speakers, and other electronic items from China, and they're paying a higher price for the items they do buy. That's a good illustration of a few of the problems with Trump's tariff strategy. He has imposed a regressive tax that makes it more difficult for Americans to afford modern tech, while simultaneously whacking the blue-collar jobs that are supported by supply chains bringing televisions and other goods from American ports to local stores.

In June, Americans paid $6 billion in tariffs—one of the highest single-month totals, in nominal terms, in American history. Tariffs imposed by the Trump administration accounted for more than $3.4 billion of that overall total, according to a new analysis from Tarrifs Hurt The Heartland, an anti-tariff coalition of business groups.

"Americans are already paying record-high tariffs, and the biggest hit to consumers is still to come," said Johnathan Gold, a spokesman for the group.

In June, when the Office of the U.S. Trade Representative held a series of hearings on the proposed new tariffs on Chinese imports, representatives from the consumer electronics industry delivered a consistent warning about the consequences of imposing those trade barriers.

Jesse Spector—director of technology policy at the Software and Information Industry Association, which represents more than 800 companies—told the office's tariff committee that new tariffs on cell phones, laptops, and tablets will "have a direct, significant, and negative impact on the businesses of our members."

He predicted that firms will "reduce product lines, raise prices, and cut American jobs."

The tariffs could also jeopardize the Trump-backed effort to see America "win the race" to 5G—that is, to be the first country with an operational fifth-generation mobile internet network.

In June, according to the CTA, American tech companies paid $131 million in tariffs on 5G-related products, including new smartphones, mobile routers, and other hardware.

In a statement, Shapiro urged Congress to revoke Trump's unilateral trade powers.

"While we support the president's effort to stop China's forced technology transfers and [intellectual property] theft," he said, "this unpredictable trade policy forces companies to raise the costs of their products, leaving American businesses, workers, and families—not China—to pay for these tariffs."

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  1. No price increases UNLESS you buy from the slave holding communist Chinese.
    Buy from other countries, and no impact. After all, that is what the tariffs are all about. To get another country to change it’s abusive policies and economic theft, without the bother of a shooting war.

    1. Capital idea. Remind me, which other country has, say, Apple set up an extensive and efficient network of manufacturers, suppliers and laborers so that we might buy from them instead?

      1. Korea – Samsung

        1. About half of Samsung’s phones are assembled in China, and even the ones that aren’t assembled in China are full of parts that were made in China. Only about 8% of Samsung’s manufacturing is in Korea, its mostly Vietnam, China, and India

    2. I can’t wait to try out my new Zimbabwean smartphone. And my router made in Bangladesh.

      1. I can’t wait to try out my new Zimbabwean smartphone.

        It’s pretty awesome. It uses 128-bit chips, because that’s the number of bits needed to hold all the zeroes to represent Zimbabwean currency.

        1. LOL!!! That was a good one!

      2. You could have saved yourself embarrassment by looking up exporters of electronics. They arent all chinese.

        1. You could have saved yourself embarrassment by not slavishly supporting Trump even when he does stuff that’s stupid and harmful. To each his own………

    3. Well, this argument for tariffs is objectionable on a similar basis as the argument for state-imposed sanctions or boycotts: it substitutes the moral judgment of the state for the moral judgments of each individual consumer.

    4. If prices on Chinese products increase, what makes you think the price on products from other countries will remain in stasis?

  2. One more victory such as this and we are undone. Bigly.

    1. Tony, go drink your Drano.

  3. We should work on making china not be the only exporter of electronics…

    Does boehm live in reality?

    1. Boehm’s reality is a lot more real than yours or Trump’s — but I repeat myself.

    2. Only exporter? Japan, South Korea, Malaysia…

  4. This is blatantly becoming a Fed fund raiser. You’re president is a fucking thief.

    1. Yup, it’s turning into a vote buying scheme.

      Step 1. Trump raises tariffs on China, associated with all sorts of “get tough” rhetoric against China
      Step 2. China retaliates by targeting American farm exports
      Step 3. Trump redistributes that tariff money to farmers, complete with boastful claims of “I’m taking care of you against those mean Chinese who are trying to punish you with their mean tariffs – oh and don’t forget who was the one who supported you when election time rolls around”

      1. You’re just a Canadian college kid. No one here gives a fuck what you think. You pedo loving piece of shit.

  5. ORANGE! MAN! BAD!
    Another totally predictable take from Boehm.

    1. Another pathetic comment from someone who can never deviate from whatever bs Trump does or spouts.

    2. You sure showed him.

  6. Can’t wait for more braindead morons to come in and defend this somehow on this “libertarian” site.

    1. Funny, you’re not a libertarian Kiddie Raper. You should focus more on covering your tracks before the FBI acts on those anonymous tips about your child porn.

      Is your windowless panel van registered in your own name? And can they trace that chloroform purchase back to you?

      You might want to just end it all now. Prison doesn’t go well for your kind.

      1. So, you are a libertarian kiddie raper?

        1. He’s too damned stupid to be anything beyond a Trumpista.

          1. Funny, as dumb as I am, my intellect is far superior to yours. You must be a neuron or two away from a persistent vegetative state.

        2. I’m neither of those things Tony.

  7. Don’t worry, folks, it’s all for our own good! I mean, let’s keep raising taxes to the point where only the rich can afford these items, right? I mean, nobody really “needs” good, smart phones, televisions, computers, etc., right? Why not go full-on and tax the little guy a bit more. We can always say we are attempting to “balance the budget,” and certainly, enough people will believe it …..

  8. Wait, I thought Mexico was paying for the tariffs. At any rate, if you want to fight the Chinese on trade you should introduce some competition into the mix. Instead of trying to punish China for not being the trading partner we want them to be, maybe we should find new trading partners. Maybe set up some sort of trade agreement with China’s rivals and our partners, some sort of trans-Pacific trade and investment partnership. I hear the Democrats are big on anything trans so they’d probably be on board with it. Isn’t that how capitalists and free-marketeers believe things should work? Competition forces others to serve your interests better than government mandates?

  9. Orange man GOOD, so long as He says that what He is doing (and forcing us to do) is directed against the un-Americans, and in favor of the REAL Americans!

    Because “karma” isn’t a “thing”… You know, us REAL Americans are SOOO much better and smarter than the un-Americans, that they’ll never notice it if we treat them like shit, and so, they will NEVER treat us in return, like we treat them!

  10. Sigh….Mr. Boehm, do you actually read what you write, and then think through the implication? One suspects not. Let’s do some math, shall we?

    US GDP (annual): 21T (yes, twenty-one trillion)
    Tariffs (annual): 96B (lets be generous, this is 25% higher than July. The math is 12 months * 8B)
    96B/21T = 0.45%

    So let me get this right…you are crying about less than one-half of 1%. Seriously? C’mon man. I get wanting to be ideologically pure, but this is just silly – even for you.

    The question is what to do about a trade partner who has, for decades, serially lied, serially cheated, and serially stolen our IP? Sorry, but your alternative is to lay back, enjoy the rape, and maybe ask for seconds. That is not libertarian, that is stupidity.

    The time has come to deal with China, while we are still able to do so. If we do not choose to fight this trade war while we are able to win it on our terms, our country will not be able to fight it later and prevail. It is that simple.

    1. Lesseee …. 25% tariffs on $300B of goods, $75B tax increase.

      All the other tariffs are different rates on different amount. It comes to $100-200B in tax increases. I;ve lost track of the total.

      And that doesn’t include the domestic price increases to match, which are the entire point of the tariffs in the first place.

      I wouldn’t be surprised if the total hit to American wallets is closer to $500B.

      Can you not do arithmetic, bro?

      1. Very well…name your alternative that will effect a change in China’s behavior: serial lying, serial cheating and serial theft of American IP.

        I can only go by what is in the article. I don’t know what happens in the future. No one does. Currently, the US GDP is 21T. Currently, the run rate of tariffs is 6B (I used a higher 8B, just to be conservative). That is the objective reality. This is not even a drop in the bucket. Less than 0.5%. I’m sorry, but that is just not raising my libertarian hackles.

        This is where I see ideological purity needing to give way to common sense and practicality. It would not be the first time this ever occurred. Heck, look at Jefferson’s Louisiana Purchase. Was it constitutional? Nope. Was it practical? Yes, in spades.

        We have been taken advantage of in trade with China for decades. The objective of tariffs is to steadily apply more and more economic pressure until lying, cheating and outright theft stops. Will that take time (to change behavior)? Yes. Will it succeed? I don’t know….but I do know that if I have to have a fight, I’d rather do it when I am stronger, not weaker.

        1. He doesn’t have an answer. That’s why he ran and hid from you.

    2. Anyone so ignorant as to think a trade war can be won is too ignorant to be anything except a control freak who thinks it is his business to mind my business.

      Who gave you the moral authority to raise prices on what I buy?

      Fuck off, slaver.

    3. It is imperative that US multinationals be incentivized to stop investing in productive capacity in China. It is a strategic issue. A lot of it was done naively believing in greater trade down the road and the existence of a large Chinese middle class to buy US products. Those things haven’t happened. New investments should be diverted to other low cost countries without authoritarian, empire-seeking leaders with horrible human rights and environmental records.

      We have plenty of unskilled people in Central America that we can put to work assembling things. They can’t be any less skilled than the ex-farmers who have urbanized China. It would have the added benefit of creating stability in those nations. You solve both the biggest issues at the same time.

      Obviously, you don’t want to shut down plants you just built, but in the long term, we’ll be better off by cutting our losses in China, booting them from the global order, and moving production to smaller, friendlier countries in C. America or SE Asia.

      Let China then collapse into a few different states once its economy craters.

  11. Tax and spend, baby! Woohoo! Love me some Democratic economics! Can’t wait until we get a carbon tax, sorry carbon tariff! That money can then be sent to build trains. All while bypassing the legislature because lets face it, that branch is so 1800s. It had a nice run but we need action now!

    1. I’ll admit, I’ve lost track. Is this all still being done under the guise of #NationalSecurity, or is there some other means by which Congress has ceded their power to the executive?

      Hey Congress. Do something.

      1. I think its still National Security. And I for one can’t wait and also dread for the pendulum to swing back and slam all these cheerleaders in the face when the Dems retake the WH and use this same rationale for their pet projects. Kinda of like how the Dems were for the nuclear option until they weren’t.

        1. The story of the growth of executive overreach is the one we should be telling about Trump, with respect to tariffs. As much as I like these tariff articles, I honestly wish there was more focus on that aspect.

          Why aren’t we holding Congress accountable? They’re really ceding our power to the executive. If they want to raise tariffs, it should be on them to convince a majority of their constituents, or pay the price next election.

    2. That money can then be sent to build trains. All while bypassing the legislature because lets face it, that branch is so 1800s.

      That makes sense. The legislature is so 1800s. So are trains.

  12. This is bad policy. It’s not going to work and has the danger of triggering a recession. Donald Trump is a moron with a grade school understanding of economics.

  13. This ain’t gonna be pretty in the 2020 election. China’s recent move basically signalled they ain’t negotiating until after that election – and until then they are just gonna harm important parts of Trump’s base. So Trump is gonna have to go into the election with his ‘I’m the best negotiator in history’ – and no ‘deal’ anywhere – and his base wondering why they are paying the highest price.

    It’s a shame too. I actually have changed my mind re the need for there to be some level of tariff that was higher than we had. Cuz some ‘sand’ is necessary for businesses (esp smaller businesses) to actually engage in longer-term investments. No tariffs – no capital investments cuz they’re just gonna get blindsided from some entity halfway around the world when currencies move.

    But there’s a big difference between that and some ‘negotiating position’ tit-for-tat with no clear end-game which is exactly the sort of ‘will we get blindsided’ stuff that tariffs previously played. He screwed the pooch. And now the only question is how much of his base are poodles.

    1. I think it will help Trump. He’ll make the election about China. Do you want soft on China Joe or me? The Chinese are banking on Joe. They’re supporting him. That’s why we can’t make a deal. They know Joe’s kid was in bed with them. This is a choice between surrender to China or winning. Which one do the great people of Wisconsin want?

  14. The idea of getting China “under control” on trade is (A) impossible through government tit for tat pressure; (B) works against the idea of smaller government; (C) works against our best interests.

    The fact that we are trusting Trump to make a moral judgment for us on this issue (and, other trade issues) is stunningly naive and against the idea of Capitalism/America which is to push more and more decision making down to the individual. It is not to give more power to the President.

    Two terrific comments from earlier.

    Jerryskids:
    “Instead of trying to punish China for not being the trading partner we want them to be, maybe we should find new trading partners. Maybe set up some sort of trade agreement with China’s rivals and our partners, some sort of trans-Pacific trade and investment partnership.”

    chemjeff radical individualist:
    Tariffs “substitute(s) the moral judgment of the state for the moral judgments of each individual consumer”…and individual companies.

    1. Hihn?

  15. Boehm and the Basement Boys, same old tune, “I gots the Orange Man Blues.”

    1. When everything is TDS, nothing is TDS.

  16. I’m confused ( no, not really ) but how is it that “the people” are “importing fewer laptops, speakers, and other electronic items—and paying a higher price for the items they do buy”

    but.. “reduce product lines, raise prices, and cut American jobs”

    Funny – I always assumed American jobs covered a lot more than just importers (resale/shipping). Gosh; if that’s the case then its no wonder the debt is so out of control!

    Maybe its time for Americans to start MAKING something instead of charging everything on the federal debt.

  17. I’m confused. Aren’t these international corporations already selling their product for the revenue-maximizing price? So they can’t pass any of the tariffs on without sacrificing sales? Tariffs will compress margins somewhere in the supply chain, probably more than one place.

    1. Tariffs don’t apply to domestic goods thus domestic supply chains don’t get “compressed”. The real problem is past policy that has actually been subsidizing imports which is where most of the U.S. debt comes from.

  18. This tariffs may adversely affect technology development…
    How good that this does not apply to metal detectors. I had recently read on this website the news about the fact that we are not doing well in this direction…

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