How Tariffs Will Skyrocket Electronics Prices

Like the industry that it covers, Sean Dobroak It was already a week by time IEEE SICTRUM Talk to him early on last Thursday, April 10, 2025. As the chief economist in IPCIndustry Association of 3000 members of electronics manufacturers, cost it to know the effect Tsunami from definitions the US The government has planned, stopped, or Sunni. Earlier this morning, he re -calculated prices for electronics on the American market after a period of 90 days on a sharp tariff that was discovered in the previous week, implementing a 10 percent global tariff, and a 125 percent tariff for Chinese imports. A day after this interview, he was re -calculating him again, yet Electronics exemption From an unspecified period. According to Dubravac, the effects of all of this are likely to include the highest prices, a lower choice for consumers, suspended investment, and even suffocating innovation.

How you had to set your expectations today [Thursday 10 April]?

Shawn Dobavak: I have reviewed our expectations this morning to take what the world will look like if the stopping of 90 days is stopped in the future and 125 percent of the definitions on China Also contract. If you look at SmartphonesIt will be approximately 91 percent effect. But if all customs duties are returned in place as they are determined on “Editing Day”, then this will be the effect of the price by 101 percent.

Estimates become highly dependent on the extent of China’s effect on the final assembly. So, if you instead look at something like TVs, 76 percent of TV devices It is imported to the United States coming from MexicoAs there has been a long time to manufacture a powerful TV because there was already a tariff on smart flat -paving TVs. The effect of the price that I see on TVs somewhere ranges between 12 and 18 percent, unlike the multiplication of smartphones.

Video game boards are another story. In 2024, 86 percent of video game boards came to the United States from China. So the definitions have a very big effect.

However, the number of smartphones coming from China has decreased significantly in recent years. It was still about 72 percent in 2024, but Vietnam was 14 percent and India It was 12 percent. Only two years ago, the United States did not import any meaningful amount Smartphones From India, it is now very important.

It seems like Suppliers She started to turn well before these definitions.

Dubravac: Supply chains are truly designed to be dynamic, adaptive and flexible. So they constantly re -improve them. I almost think about supply chains like living entities. If there is a disruption in one part, this is similar to the front to know how to solve the registration, and how to recover.

We offer these estimates assuming that nothing changes, but everything will change if this is always 125 percent. You will see an acceleration in the China chapter, which has occurred since 2017 pandemic.

It is also important to realize that the United States is not the only buyer for smartphones. It is produced in a global market, and therefore supply chains will improve based on the dynamics of the global market. The rest of the series may remain intact, for example, China can continue to produce smart phones for Europe, Asia and Latin America.

How can supply chains be adaptive in this constantly changing environment?

Dubravac: This, for me, is the most harmful aspect of all this. Supply chains want to adjust them, but if you are not sure of what the environment will be in the future, it will be hesitant. If you are investing in a new-private factory, a modern, sophisticated, semi-self-investment factory, these are long-term investments. You look at a time horizon from 20 to 50 years, so you will not collect this type of investment in geography if you are not sure of the broader situation.

I think one of the great paradoxes in all of this is that there was already a chapter from China, but because the dynamics of customs tariffs were very liquid, it caused a temporary interruption in the new commercial investment. As a result of that possible temporary suspension, the effect of definitions can be more clear on American consumers, because supply chains do not adapt to the speed that may be modified in a more confirmary environment.

A lot of damage was made due to the uncertainty that was created, and it is not clear to me that any of this uncertainty has been solved. The 3000 companies express a huge amount of uncertainty about the current environment.

Low -price electronics contain thin margins, what does this mean for the low consumer?

Dubravac: What I see there is families bound by the financial statements, often consumers of low -price products, and they are families who are likely to see the cost of tariffs. There is no margin along the way to absorb these higher costs, and therefore they may see the highest pricing percentage.

Low -price laptop is likely to witness an increase in prices in the percentage of the percentage. So I think the challenge is that families are at least in a good position to deal with the effect that is likely to see the greatest effect.

For some products, we tend to have a higher price flexibility at low price points, which means that the simple change tends to have a significant negative impact on the demand. There may be other things that occur in the background as well, but the clear result is that American consumers have a lower option.

Some companies have already announced that they will cut their low -price models, because it is no longer logical for sale on the market. This can happen on the basis of the company within their models choices, but it may also happen widely, in a full category where you may see the three or four options with high -end prices for a specific category of the market. So now I just left with more expensive options.

What are the other effects that definitions make?

Dubravac: Another long -term effect we talked about is that while companies try to improve cost, they transport engineering employees to treat costs. They withdraw this engineering employees from other problems they were trying to solve, such as the next advanced innovation. So some of this loss is the loss of innovation. Companies about the cost will worry, and as a result, they will not make the next repetition of the product innovative. It is difficult to measure, but I think it is a possible negative secondary product.

The other thing is that the definitions generally allow local producers to raise their price as well. I have already seen it for steel manufacturers. Companies may make us more or more viable, but at the end of the day, consumers and companies that will pay higher prices.