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Phones

Trump's China tariffs would mean pricier phones for you, CTA report says

Trump's $300 billion tax proposal on Chinese goods would hurt American consumers but benefit other countries.

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CTA's new study highlights that more tariffs would raise the cost of cellphones from China by 22%. 

David Gannon / AFP/Getty Images

A new study details how President Donald Trump's $300 billion tariff proposal on imported Chinese goods could harm US consumers. The study, commissioned by the Consumer Technology Association, highlights how the prices of phones, laptops, tablets, video game consoles and toy drones from China would rise significantly as a result of the potential tariffs. 

The price of phones imported from China, for example, would rise by 22 percent, while overall US prices for phones would increase by 14 percent. This means the average retail price of a phone would increase by $70, according to the study. While the increased prices would lead to US consumers having to shell out more money, the trade proposal would favor manufacturers in Korea and Vietnam by increasing their export revenue by $1.8 billion and $1.2 billion respectively. 

The report was released Monday by the CTA, a trade organization representing over 2,000 consumer tech companies, and was researched by economic consulting firm Trade Partnership Worldwide. 

Prices on laptops and tablets specifically from China would increase in cost by 21 percent, according to the report. For all laptops and tablets sold in the US, it'd mean an increase of $120 in the average price of a laptop and a $50 increase in the price of a tablet. Vietnam would reap the benefits the most with its export revenue increasing by $220 million. However, industry experts believe that, in the end, China would remain the "dominant supplier," covering 80 percent of total imported laptops and tablets. 

For video game consoles imported from China, prices would increase 21 percent, and for toy drones they'd rise 20 percent. 

Why would countries such as Vietnam and Korea have trouble unseating China as a dominant supply leader? The CTA attributes it to skilled labor. 

"There is a misnomer about the cheap labor that comes out of China," said Bronwyn Flores, policy communications specialist at the CTA. "It's really the skilled labor that goes into making a brand new smartwatch and television ... It's very intricate work."

In her experience talking to industry CEOs, Flores said having other countries take over the manufacturing process from China would involve lengthy training that could take anywhere from nine months to a couple of years. 

"China has developed such a huge manufacturing industry," added Rick Kowalski, senior manager of industry analysis and business intelligence at the CTA. "If you have a country that is able to manufacture multiple components in a close space ... [it] makes it very efficient for laptops." 

Organizations such as the CTA have previously criticized the Trump administration's plans to impose higher tariffs on nations such as Mexico, calling the efforts "shortsighted."

The Office of the United States Trade Representative didn't immediately respond to a request for comment.