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25% US Trade Tariff on PC Components Postponed 90 Days, Prices Will Still Rise
By Jon Sutton on December 3rd, 2018 at 04:18pm - original article from game-debate

Politics intersects with everything, even the price you pay for your PC gaming hardware, as many will be all too aware. It also probably hasn’t escaped your notice that new US trade tariffs are being implemented on imported PC components, with expected price increases to be anywhere from 10-25%.

Just about every hardware manufacturer or component provider you can name is going to be affected in some form by these new tariffs, both within North America and a ripple of price increases outwards to the rest of the globe. As of right now, there is a 10% trade tariff on imported Chinese goods, with this figure set to rise to 25% on January 1st, 2019.

To put these potential tariff increases into perspective, most AIB graphics cards have profit margins of 3-8% so any and all market fluctuations can have a dramatic effect on their pricing. For AIB partners, it’s easy to see how a 25% trade tariff has a potentially huge knock-on effect to how they’ll need to price their GPUs in order to even the books, let alone make a profit.

However, US president Donald Trump and Chinese president Xi Jinping have agreed to a temporary truce in the trade war, delaying the tariff hike by at least 90 days.

“Both sides believe that the principled agreement reached between the two presidents has effectively prevented the further expansion of economic frictions between the two countries,” said Xi Jinping.

Before you go getting excited though, it looks as if this new truce may not actually be any help at all in stabilising component prices. The vast majority of PC gaming hardware manufacturers have either already or are in the process of moving their manufacturing out of China and into Taiwan, Korea, and other territories. This was a pre-planned move to circumvent the previously expected 15% trade tariff rise on January 1st, 2019.

In the short term, this means PC component prices will still be expected to rise as AIBs, OEMs and other PC gaming hardware providers look to offset the costs of moving manufacturing to new territories. These costs will inevitably be passed onto consumers globally and could mean considerable price rises.