TVs and phones prices may go up due to US-China trade war

      

What do many TVs, batteries, computer monitors, and printer ink cartridges all have in common? They're made in China, of course. 

They could all also cost about a quarter more if the talked-up trade war between the US and China becomes reality. 

However, unpick what's happening, and why, and a Pandora's box opens that reveals just how much this is not only about trade, but about domination of future tech like AI, autonomous cars and 5G.

The Trump administration doesn't think China properly protects intellectual property or sufficiently opens its markets to US companies. 

It also happens to have a massive trade deficit with China, with Americans importing vastly more goods from China than it exports. 

Which is why it proposes putting 25 percent tariffs on imports of TVs and over a thousand other product categories from China, ostensibly to help create a level playing field. 

Those tariffs equate to about US$150 billion in total. The trouble is, the cost could end up simply being passed straight back to anyone in the US that wants to buy Chinese-made electronics.

Chinese-made TVs could be about to jump in price for buyers in the US Credit: Jamie Carter

How expensive could they get?

Chinese-made electronics could become as much as 23% pricier for US shoppers, according to a report from the Consumer Technology Association (CTA) – which stages the CES in Las Vegas each January – and the National Retail Federation (NRF). 

A TV made in China that costs $250 today would cost $308 after the tariffs are applied, it says, while one that costs $500 today would cost $615. "These proposed tariffs are bad for the economy, businesses and American consumers," says Gary Shapiro, CEO and president, CTA.

"For TVs, just one of the 1,300 products on the administration's list, American pocketbooks will suffer." The US imported 23 million TVs from China in 2017, according to Sigmaintell.

Does this mean all TVs?

That 23% price increase applies only to TVs imported from China. "The top three Chinese brands (TCL, Hisense & Skyworth) combined accounted for more than 20% of worldwide shipments during 2017, and manufactured many more sets for other brands too," says James Manning Smith, Research Analyst at Futuresource Consulting. 

China is currently experiencing a boom in TV-making factories, and it seems inevitable that China will pretty soon dominate TV production. 

"The likelihood of this policy proposal becoming law is still in the balance, but the impact on consumers would be considerable," says Manning Smith, suggesting that the average price of a TV in the US could jump from $450 to $500.

However, there are always loopholes. "Companies such as TCL, which has grown rapidly in the last 24 months in the US and now finds itself competing closely with LG, has manufacturing facilities all over the world," says Manning Smith. 

"It would be likely that they would be able to pivot production of sets destined for the US to countries unaffected by the tariff." Both TCL and Hisense have assembly plants in Mexico.