American technology companies feel a pinch of China’s tariffs

Deena Ghazarian has only been engaged in a year when President Donald Trump’s first term of trade policies sent their company in line.

It was 2019 and her California-based company, Austere, has just agreed to provide several large retailers in the United States with audio and high-end video accessories that are largely manufactured in China.

Then Trump imposed extensive tariffs for China, and at night Deena turned out to be paying 25% additional payment to each cable and component that imported from scratch before.

She was forced to absorb costs and for a while she thought she would fall apart.

“I literally thought I was going to start and terminated a business in less than a year,” she says. “I had spent all this time, money and effort, and to have something like this blind, you were shocking.”

The company has crept, but like many other American companies, which is now in a strikingly similar situation.

Upon his return to January, Trump raised the rates for all goods imported from China by 20% and put taxes of 25% for Canadian and Mexican products just to slow down some of them until April.

The president says he wants to force these countries to do more to stop the streams of illegal drugs and migrants in America, to return more production in the United States and to deal with what he sees as unfair trade imbalances.

But the obligations are much wider in scope than last time, when many products were gradually being taken over and exceptions were provided to many products.

Goods such as smartphones, desktops and tablets are now making tariffs for the first time, while taxes on others have risen higher.

“US importers have to pay these taxes, not exporters,” says Ed Britva, Vice President of International Trade in the Consumer Technology Association (CTA), a trade body in North America, which represents more than 1,200 technology companies.

“American business and consumers will suffer.”

Enterprises like Ghhazarian are particularly exposed. China is still a number one e -product supplier in the US, with imports worth $ 146 billion (£ 112 billion) in 2023, According to official data.

Meanwhile, 87% of video game consoles in the United States came from China in the same year, 78% of smartphones, 79% of laptops and tablets and two -thirds from monitors, Says CTA.

While many US companies like Sosteri diversified their supply chains away from China from the first term of G -N Trump, countries such as Thailand, Taiwan and Vietnam still do not offer the same production opportunities and expertise.

At the same time, the US President is now heading for Mexico, another major supplier of electronics. And as domestic production in the US has increased, partly due to tariffs, it is still limited by higher costs and higher regulations.

“Yes, Apple is now making some iPhone in India and (Taiwanese chipmaker) TSMC is diversifying into Arizona,” says Mary Lowulver, a senior associate at the Peterson Institute in Washington.

“But China is still a massive part of the supply chain. Links with new suppliers take time to develop, they are expensive to develop.”

Studies show that companies are handing over a large part of tariff costs by setting prices. Earlier this month, Corie Barry, head of the American electronics dealer Best Buy, said that the “huge majority” of the new tariffs “probably” is likely to be handed over to the consumer “as suppliers in the industry have so small margins.

In February, Taiwanese Acer said the price of his laptops was likely to increase by 10% based on 10% China’s obligations at the time, while the US HP group warned that its profits would be more low due to tariffs.

G -Ghazarian says he may need to raise his prices this year, but worries he can cause a reaction. “There is a price in which the customer is satisfied with the value of the goods provided.

“The moment I shift above that I am starting to lose customers. High inflation pressed the Americans.”

During the first term of Mr Trump, companies like Apple have successfully provided exceptions to products and we can still see carved.

The internal persons also offered G -n Trump to view tariffs as a negotiation tactics and could relieve them if he won discounts, as he did when China agreed to buy more American goods in a deal reached in 2020.

Fears of US economic delay He can also make him change the course.

For now, however, the tension seems likely to escalate. China, Mexico and Canada have promised to avenge all their duties in the United States, and this week, Trump has threatened to double the tariffs of Canadian steel and aluminum to return at the last moment.

He plans to soon impose “reciprocal tariffs” on the rest of the world and threatens the increase in tariffs to 60% for Chinese goods while on the campaign path.

There is a risk that this can increase the cost of technological goods worldwide if China is forced to move production to countries where labor costs are higher. In addition, countries can withdraw with imported US technology tariffs.

G -Ja Ghazarian says she is worried, but at least she has prepared herself this time. Like many other American business owners, she ordered additional equipment before Mr Trump took office and stored him in her warehouse on the east coast.

She hopes she will receive the company next year until she fails again.

“This may mean finding a more profitable way to produce the product or do something completely different. It is disappointing that I have to focus on survival rather than grow my business.”