Donald Trump is threatening taxes of up to 25 percent on chip technology developed outside the United States, and it would not stop there. Are higher electronics prices the result?
Donald Trump is a fan of import taxes on goods that do not come from the United States. Starting next month, a 10 percent tax goes into effect on goods from China, but that is not enough for the president. In an interview with CNN, Trump is waving a specific 25 percent tax on chip technology that could take effect in April. Throughout his tenure, those tariffs could be increased even further, Trump said.
The president is using taxes as pressure to chip manufacturers to move production to the US. He must not know about financial incentives granted through the Chips Act. But that hard-line approach complicates things just as much for American companies. Intel, for example, does a lot itself, but outsources some of its production to Taiwan’s TSMC.
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Higher prices
What effect U.S. import tariffs will have on the global electronics industry remains to be seen. Consumer groups fear that consumers will be presented with the final bill. If chips become more expensive, it is not unlikely that prices of products containing the chips will rise along with them. Among other things, Acer already announced that it will raise the prices of its laptops by ten percent once the “China tax” takes effect.
The Consumer Technology Association estimated in a January report that PC prices could rise up to 46 percent by 2025. Smartphones will also become up to 25 percent more expensive. Whether the snowball will roll into Europe is also a matter of conjecture. The IT industry is a global chain, so what happens in the United States often impacts the European market.