It looks like the price of GPUs could be about to hit new highs as political disputes between US and China worsen. Yes, it appears that PC industry is about to be caught in the crossfire of a trade and tariff dispute between two of the world’s most important manufacturing countries.
Rumors of the Trump-era tariff being reinstated first broke a couple of weeks ago, but now a date has been set in stone to make it a reality. Let’s see how this will likely affect GPU users and when fans can expect to see some ramifications.
GPU prices to rise in the US
The price of graphics cards and other PC components is set to rise again as the US re-imposes tariffs on goods imported from China. According to the USTR (United States Trade Representative), the 25% duty will take effect on June 15, 2024. It’s expected that this will apply to graphics cards, motherboards, and desktop cases. The tariff will supposedly run until May 31, 2025, with options of a renewal not off the table. This is because China has long been the main manufacturer of these components, and the tariffs will make them more expensive to import.
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The Biden administration argues that the tariffs, originally imposed during the Trump era, have pushed companies to diversify their supply chains and move production out of China. However, the tech industry disagrees. They say that China is still the main source for many key components, and that moving production elsewhere takes time. They also argue that the tariffs are essentially a tax on American businesses and consumers. Some GPU users may agree as they are now set to pay more for their components as a result of this disagreement.
Future supply concerns
Hewlett Packard Enterprise said in a statement that the tariffs have increased the cost of their warranty services because they have to pay more for components to fix devices. They also say that they have no choice but to use graphics cards imported from China because there isn’t enough supply available elsewhere to meet demand. In a quote, they noted that “production of GPU accelerator modules outside of China currently remains insufficient to meet HPE’s requirements for US manufacturing or global demand, which has increased sharply in recent years”. In 2021, Nvidia admitted to the USTR that “efforts to create new capacity in countries that presently do not manufacture such products (such as the US and Vietnam) were unsuccessful”.
It is unclear how much progress companies like Nvidia and AMD have made in moving production out of China since this, but it seems unlikely that the tariffs will have a major impact on supply in the short term. However, it looks like a near certainty that PC builders will be expected to pay a little more for graphics cards and other major components in the coming months.
