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US consumers could see the price of their next GPU rise if this tariff is reinstated

Will geopolitical instability mean rising tech prices?
Last Updated on May 24, 2024
Close-up of NVIDIA GeForce RTX 2080 Ti graphics card in a dark setting, highlighting the "RTX 2080 Ti" and "GEFORCE RTX" text on the card. Due to US-China tensions, graphics cards' prices have seen fluctuations.
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With reports suggesting nearly half of the world’s consumer electronics are now produced in China, the threat of fresh US tariffs on some Chinese exports could have a big impact on the cost of tech for consumers, including graphics cards and motherboards. In a big year for GPUs with both NVIDIA’s 50 series and AMD’s RX 8000 series set for release, all eyes will be on how any potential tariffs may impact costs to consumers.

Under Trump’s administration, a 25% duty was placed on affected Chinese goods, and although many restrictions and duties remain, and despite strong rhetoric, the US has resisted restoring the Trump-era tariffs. For the last year, the US Trade Representative (USTR) has delayed the restoration of the 25% duty on specific goods from China, as they gather feedback from industry figures on the potential impact and cost this would bring, as trade groups lobbied Washington to either modify or cancel the tariffs entirely.

However, earlier this week USTR issued their findings in a notice, announcing their recommendation to the White House that the “tariffs on covered products be maintained”, which will no doubt come as a blow to affected companies who rely on Chinese manufacture for their products.

(Source: USTR)

How will these tariffs impact GPUs and other electronics manufactured in China?

With NVIDIA and AMD preparing for the release of their next-generation GPUs, the threat of tariffs on electronic goods made in China means the stakes couldn’t be higher for the US tech giants. Some of the affected items would be motherboards, desktop PC cases, and graphics cards built in China, and if these duties are imposed this could likely mean higher prices for consumers down the line.

The issue for NVIDIA and other US firms is that there currently isn’t an existing, cost-effective alternative to Chinese mass-manufacture, although tech firms are starting to look elsewhere with Apple recently announcing a migration of their iPhone production to India and Vietnam.

Despite the release of their recommendation, the USTR is yet to officially confirm the resumption of these tariffs or provide clarity on when these duties may resume. However, the US government has announced an increase of up to 100% in other tariffs on Chinese goods including semiconductors, lithium-ion EV batteries, and electric vehicles, in retaliation for alleged copyright infringement and unfair trade practices.

What happens next for US-China tech commerce?

Tensions between the two global powerhouses are certainly running pretty high. In a recent article on PCGuide, we outlined how the Chinese government was maneuvering to reduce its own reliance on US-imported computer chips and encouraging Chinese tech firms to develop their own chips instead, or alternatively buy Chinese. This was partly in reaction to the US imposing restrictions on the chips that US firms could export to China.

If these tit-for-tat exchanges continue, US tech firms like NVIDIA may be further caught in the middle, unless they can successfully lobby for tariffs in this sector to be paused, or find alternative manufacturing partners. As consumers, all we can hope is that it doesn’t result in our being priced out of our favorite tech.