Smartphones Have Gotten Really Expensive: The Impact of Trade Wars on Consumer Prices

Smartphones have gotten really expensive, and it's hard to deny that this trend has been ongoing for several years. Back when Apple introduced the iPhone 10, everyone was screaming when they announced that it was going to be $1,000. Since then, the price of a flagship smartphone has pretty much become the norm for many consumers. Unfortunately, if you live in the U.S., that price might be going up even further now.

The gist of the situation is this last year the US and China engaged in a trade war. While both countries tax imports coming into either country in the US, it started with aluminum and steel but expanded a lot into three separate lists eventually. The US started putting tariffs on individual electronics components like PCBs and touchscreens. However, these lists didn't include fully assembled electronics like your smartphone or a laptop. Most of these tariffs only really affected the businesses that were bringing in individual components to United States from China, as big companies assemble smartphones laptops and other electronics in China and then import them into the US.

However, there is a fourth list of products being introduced which pretty much blankets the entire electronics industry. It could go in motion as soon as July 2nd if this list goes into effect. Pretty much any smartphone laptop tablet or other electronics product that is assembled in China and then shipped into the United States is going to be hit with tariffs up to 25%. While it might seem like just more money for the US, it's usually the end consumer that ends up paying the foot of the bill. A real-world example can be seen at Computex, a huge computer trade show where PC case manufacturer NZXT unveiled their new line of products. The US pricing for these products is ten to thirty dollars more than the global pricing.

This increase in prices is likely due to the fact that there's already a tariff on steel and aluminum imports. The PC chassis made from what those components are often used in would also be affected by this, as manufacturers like NZXT have cases produced in China. If your phone or tablet is manufactured in China you're probably going to see a similar price increase. The new tariffs will hit actual Chinese companies like Xiaomi and OnePlus the hardest. However, it's not hard to imagine seeing Google and Apple increasing their prices as well.

Both of these companies use a company called Foxconn to actually manufacture their products in Shenzhen. Unless Foxconn moves all of its manufacturing out of China to somewhere like Taiwan or elsewhere, you're probably going to see that price increase in your product. This situation could potentially give the upper hand to a few select companies. Samsung only has two factories still operating in China because it's preferred to move most of its manufacturing out of the country.

They were already the number one smartphone manufacturer in the world and were set to be d-seated by Huawei within the next two years. However, we often fall out of this whole trade war situation anyway. It looks like Samsung is going to have a couple of pretty good years now. There is a public forum set to take place from June 17th to June 25th and then there's a 7-day rebuttal period where companies like Best Buy are expected to show up to try to get the government to not put these tariffs in place because they're going to have to raise their prices. If you want to follow along with the story, make sure you stay tuned to Android Authority as I'm going to be following it very closely.

There's only a few days until this actually all goes into effect, so I will catch you in the next video.

"WEBVTTKind: captionsLanguage: ensmartphones have gotten really expensive I don't think anyone can deny that back when Apple introduced the iPhone 10 everyone was screaming when they announced that it was going to be $1,000 but since then the price of $1000 has pretty much become the norm for a flagship smartphone and unfortunately if you live in the u.s. that price might be going up even further now basically the gist of the situation is this last year the US in China engaged in a trade war though this means that both of them tax imports coming in from either country in the US this started with aluminum and steel but it expanded a lot into three separate lists eventually the u.s. started putting tariffs on individual electronics components like PCBs and touchscreens but here's the thing these lists didn't include fully assembled electronics like your smartphone or a laptop now most of these tariffs only really affected the businesses that were bringing in individual components to United States from China most big companies assemble smartphones laptops and other electronics in China and then import it into the United States so it didn't affect them quite as much but there is a fourth list of products being introduced which pretty much blankets the entire electronics industry and it could go in motion as soon as July 2nd if this list goes into effect pretty much any smart phone laptop tablet or other electronics product that is assembled in China and then shipped into the United States is going to be hit with the tariffs up to 25% and while that might seem like just more money for the US it's usually be the end consumer that ends up paying the foot of the bill here's a real-world example I was just in Taipei Taiwan for Computex which is this huge computer trade show and the PC case manufacturer NZXT unveiled their new line of products but I looked at the pricing and the US pricing for these products is ten to thirty dollars more than the global pricing that's because there's already this tariff on steel and aluminum imports and what our PC chassis is made of steel and aluminum NZXT manufacturers these cases in China and if your phone or tablet or a laptop is manufactured in China you're probably going to see a very similar price increase now the new tariffs probably going to hit actual Chinese company like Xiaomi and oneplus the hardest but don't be surprised if you see Google and Apple increasing their prices as well both those companies use a company called Foxconn to actually manufacture their products in Shenzhen and unless Foxconn moves all of its manufacturing out of China to somewhere like Taiwan or elsewhere you're probably going to see that price increase in your product this recent report from JP Morgan is suggesting that Apple would need to increase the price of the iPhone excess about fourteen percent from nine hundred and ninety nine dollars to eleven hundred and forty two dollars in order to make up for this tariff difference now Apple makes almost a 200% margin on their products so it's very possible that they could keep their prices the same and just eat that cost but for a company like Xiaomi which has a five percent cap on all their hardware products there could be a lot of trouble now Xiaomi Heusen actually entered the u.s. phone market yet even though they were planning to buy at the end of 2019 but things like the meat electric scooter and the knee box s are very popular products in the United States now interestingly this tariff could also give the upper hand to a few select companies Samsung only has two factories still operating in China because it's preferred to move most of its manufacturing out of the country they were already the number one smartphone manufacturer in the world and they were set to be d seated by Huawei within the next two years but we always kind of fall out of this whole trade war situation anyway so it looks like Samsung is going to have a couple of pretty good years now there is a public forum set to take place from June 17th to June 25th and then there's a 7-day rebuttal period where companies like Best Buy are expected to show up to try to get the government to not put these tariffs in place because they're gonna have to raise their prices if you want to follow along with the story make sure you stay tuned to Android authority calm because I'm going to be following it very closely there's only a few days until this actually all goes into effect so I will catch you in the next videosmartphones have gotten really expensive I don't think anyone can deny that back when Apple introduced the iPhone 10 everyone was screaming when they announced that it was going to be $1,000 but since then the price of $1000 has pretty much become the norm for a flagship smartphone and unfortunately if you live in the u.s. that price might be going up even further now basically the gist of the situation is this last year the US in China engaged in a trade war though this means that both of them tax imports coming in from either country in the US this started with aluminum and steel but it expanded a lot into three separate lists eventually the u.s. started putting tariffs on individual electronics components like PCBs and touchscreens but here's the thing these lists didn't include fully assembled electronics like your smartphone or a laptop now most of these tariffs only really affected the businesses that were bringing in individual components to United States from China most big companies assemble smartphones laptops and other electronics in China and then import it into the United States so it didn't affect them quite as much but there is a fourth list of products being introduced which pretty much blankets the entire electronics industry and it could go in motion as soon as July 2nd if this list goes into effect pretty much any smart phone laptop tablet or other electronics product that is assembled in China and then shipped into the United States is going to be hit with the tariffs up to 25% and while that might seem like just more money for the US it's usually be the end consumer that ends up paying the foot of the bill here's a real-world example I was just in Taipei Taiwan for Computex which is this huge computer trade show and the PC case manufacturer NZXT unveiled their new line of products but I looked at the pricing and the US pricing for these products is ten to thirty dollars more than the global pricing that's because there's already this tariff on steel and aluminum imports and what our PC chassis is made of steel and aluminum NZXT manufacturers these cases in China and if your phone or tablet or a laptop is manufactured in China you're probably going to see a very similar price increase now the new tariffs probably going to hit actual Chinese company like Xiaomi and oneplus the hardest but don't be surprised if you see Google and Apple increasing their prices as well both those companies use a company called Foxconn to actually manufacture their products in Shenzhen and unless Foxconn moves all of its manufacturing out of China to somewhere like Taiwan or elsewhere you're probably going to see that price increase in your product this recent report from JP Morgan is suggesting that Apple would need to increase the price of the iPhone excess about fourteen percent from nine hundred and ninety nine dollars to eleven hundred and forty two dollars in order to make up for this tariff difference now Apple makes almost a 200% margin on their products so it's very possible that they could keep their prices the same and just eat that cost but for a company like Xiaomi which has a five percent cap on all their hardware products there could be a lot of trouble now Xiaomi Heusen actually entered the u.s. phone market yet even though they were planning to buy at the end of 2019 but things like the meat electric scooter and the knee box s are very popular products in the United States now interestingly this tariff could also give the upper hand to a few select companies Samsung only has two factories still operating in China because it's preferred to move most of its manufacturing out of the country they were already the number one smartphone manufacturer in the world and they were set to be d seated by Huawei within the next two years but we always kind of fall out of this whole trade war situation anyway so it looks like Samsung is going to have a couple of pretty good years now there is a public forum set to take place from June 17th to June 25th and then there's a 7-day rebuttal period where companies like Best Buy are expected to show up to try to get the government to not put these tariffs in place because they're gonna have to raise their prices if you want to follow along with the story make sure you stay tuned to Android authority calm because I'm going to be following it very closely there's only a few days until this actually all goes into effect so I will catch you in the next video\n"