Amid the ongoing trade war between the U.S. and China, the tech industry is feeling the strain. Networking giants such as Cisco have increased their prices for suppliers, to reflect the increased manufacturing costs. In early September 2018, during an interview with The Register, Cisco CEO Chuck Robbins warned: “the tariffs that are suggested are across a lot of our core networking products, so it's fairly significant.” Who’s feeling the pinch and will OEMs pass the costs to consumers?
Expect Price Increases for Tech
Cisco is increasing prices for approximately 3,000 SKUs due to the new tariffs enacted in July, according to a recent CRN news article. The US Trade Representative (USTR) tariffs on September 24, 2018, included a list of 200 pages of imports from China. The majority are food and raw materials, but some tech components will affect consumers’ pocketbooks. These may include:
- Storage drives
- Magnetic or optical readers
- Smart cards
- Television cameras, digital cameras and video camera recorders
- Flat panel screen assemblies for TV and other monitors
- LCDs or LEDs, such as indicator panels
- Flat panel display parts other than for reception.
- LEDs for LCD backlighting
When Will the Increase Happen?
It depends on the individual manufacturers, but many are sending preemptive warnings to suppliers regarding price fluctuations. A senior administration official informed Business Insider to expect an increase as soon as early 2019.
What Can Consumers Do?
With all of the tariff talk and more to come, can consumers avoid higher costs? Recent research provided by the U.S.-China Economic and Security Review Commission publicly shares the major manufacturers in tech that are mostly affected; Cisco, Dell, HP, IBM, Intel, Microsoft and Unisys, all of whom source at least half of their components from China.
It generally takes time for political and economic ripples to hit consumers pockets, and this is no different. Those with larger money pools such as the large corporations involved will inevitably absorb some of the costs. However, eventually, it will trickle down to the smaller businesses and consumers.
As the Trade War Continues
Look for suppliers that are announcing that they will not increase prices until 2019. Everyone from Walmart to Cisco and Dell has written letters to the U.S. government asking to stop new tariffs, according to Newsweek and The Register. Regarding your business’ or personal tech improvements, we’d recommend making those purchases sooner than the end of Q4, and you could save some money.
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