The big picture: President Trump's long-discussed tariffs have taken effect. While the initial duties are not as severe as anticipated, they remain far-reaching. China has already responded in kind, and the resulting trade war is expected to impact a wide range of electronics and other products, pushing prices into uncharted territory.
President Donald Trump has signed an executive order imposing a 10 percent tariff on products from China. Given China's significant role in consumer electronics supply chains, the decision could drive up prices for laptops, smartphones, game consoles, PC components, TVs, and other goods.
Although Taiwan-based TSMC and South Korea's Samsung produce the most advanced semiconductors powering the latest processors and game consoles, Chinese companies still play a crucial role in assembly and the supply of key raw materials. Additionally, Chinese semiconductor fabs remain important for manufacturing older process nodes.
Trump has also previously voiced concerns over Taiwan's dominance in the semiconductor industry, suggesting he might take action against TSMC.
Prior reports suggested that Trump might raise tariffs on China to 20, 60, or even 100 percent. While that remains a possibility, such increases could add hundreds of dollars to the prices of laptops and game consoles.
Economists warn that the tariffs could significantly harm the US economy by reducing GDP, costing jobs, and driving up inflation, which had been declining after reaching historic highs in 2022. Although Trump campaigned on ending inflation and lowering prices, a strategy many credit as a key factor in his victory, he has more recently acknowledged that there could be "some pain."
China swiftly retaliated against the new tariffs, imposing duties of 10 to 15 percent on fuel and agricultural equipment. Additionally, it enacted export controls on rare earth metals and launched an antitrust investigation into Google.
Trump introduced the tariffs to address China's trade surplus with the US while also pressuring Beijing to curb the flow of fentanyl. The synthetic opioid, produced using precursor chemicals from China, has contributed to a drug abuse crisis in the US. The president also threatened 25 percent tariffs on certain goods from Canada and Mexico but postponed the orders for 30 days after both countries committed to strengthening border security.
Less than one percent of the illicit fentanyl supply in the US is estimated to originate from Canada. Furthermore, fatal overdoses had already begun to decline nationwide last year.
Trump's anti-China tariffs go live, could drive up consumer electronics prices
