In addition to sensitive political issues, the smartphone industry could face major changes due to Donald Trump's policies.
Mr. Trump has repeatedly expressed his intention to impose high tariffs on imported goods, a measure he took during his first term. This time, he is likely to intensify the strategy, aiming for a 20% tariff on all imports and up to 60% on products from China.
The 47th US president-elect said the tariffs would encourage US companies to move factories back home. However, that could lead to higher prices as the extra costs are passed on to consumers.
47th President-elect of the United States Donald Trump.
Smartphone manufacturers return to the US?
For major smartphone makers like Apple and Google, these tariffs could have a significant impact.
Apple, with its reliance on Chinese labor, may struggle to maintain its cost structure. Although the company has shifted some production to India and Vietnam, high tariffs could impact product prices.
Apple CEO Tim Cook recently had a conversation with Mr. Trump about the challenges of doing business in the European Union, which could lead to a deal between the two sides.
Meanwhile, Google also relies on manufacturing in China for its Pixel phone line, but the chances of getting a waiver from the president are low.
The increased costs could force companies to pass the burden on to consumers. While some companies may consider moving production back to the US, the process will not happen immediately and could take years.
Additionally, tariffs not only affect domestic consumers but can also harm American businesses in international markets.
A trade war could erupt as other countries retaliate by imposing tariffs on US products. This could reduce demand for US goods in foreign markets and make them more expensive, pushing consumers to cheaper options from Chinese manufacturers.
Ultimately, a full-blown trade war could disrupt global supply chains, leading to component shortages and increased costs that directly impact consumers.
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