A hot potato: Another warning has been issued about the potential impact of the Trump administration's tariff proposals. The Consumer Technology Association (CTA) writes that the extra cost of technology products could lead to a decline in US purchasing power of up to $143 billion. With purchases of laptops and tablets declining by as much as 68%, the tariffs could spoil what is set to be a record year for technology retail revenue in the United States.
Trump has said he plans to impose 10% to 20% tariffs on imported goods, while imports from China will be hit with an additional 60% tariff. He also proposed a 25% tariff on Canadian and Mexican imports
The CTA writes that Americans are set to spend a record $537 billion on consumer technology this year, up 3.2%, but that doesn't factor in the potential impact of the tariffs.
The organization states that more expensive tech goods could lead to a spending decline of $90 billion to $143 billion. The report suggests that purchases of laptops and tablets could decline by as much as 68%, gaming console purchases could drop by as much as 58%, and consumption of smartphones could fall by up to 37%.
The CTA also believes that the tariffs could push laptop and tablet prices up by 45% in the US. Game consoles would become 46% more expensive, monitors would see a 31% rise, and smartphones would be up 26%.
If Trump were to implement a 20% tariff on all imports from all countries and a 100% tariff on all imports from China, laptop and tablet prices could increase by up to 68%, console prices by 58%, and smartphone prices by 37%.
"The tech sector is America's economic engine, driving global innovation and job creation," said CTA CEO Gary Shapiro. "Our positive forecast reflects the industry's strength, but proposed tariffs threaten the deflationary power of tech in the global economy. Tariffs are a tax on American businesses and consumers. We urge the incoming administration and Congress to prioritize an Innovation Agenda that fosters growth."
The report also disputes Trump's assertion that the tariffs would bring manufacturing back to the US. The CTA predicts that it will simply move from China to other countries where it is cheaper to operate than in North America. Even if manufacturing did come back to US shores, the tech industry would still rely on Chinese suppliers for many components.
It's not just general consumer tech goods that could see price increases. It was reported last month that Nvidia and AMD are increasing the production and shipping rate of their upcoming GPUs so they can avoid the Trump administration's tariffs – at least for a while.
Tech association warns Trump tariffs could reduce US purchasing power by $143 billion
