Ed Brzytwa, Vice President of International Trade at the Consumer Technology Association, discusses how tariffs create uncertainty and economic headwinds for businesses in the industry.
president Donald Trump’s tariffs It creates uncertainty about trade policies and calm business decisions by companies in the consumer technology industry. As a result, small businesses face difficult choices and consumers face the prospect of price increases. Industry experts are warnings.
Ed Bourzitoi, vice president of international trade at the Consumer Technology Association (CTA), told FOX Business in an interview that while some companies may be able to reduce some of their tariff costs, others will be forced to raise consumer prices.
“Every company has to make their own choices about how to deal with this. There may be companies that have more capabilities to scale up costs across the business and they may have to pass those costs through the supply chain,” Brzytwa said.
“For small businesses, I think it’s much more difficult to do that because they may not have the resources to pay tariffs at this time,” he explained, noting that around 80% of the 1,200 member companies in the CTA are small businesses and startups. “If they pay tariffs, they’ll need to be repaid by their customers. And if they raise prices too much, they may not even have a market for their products because tariff rates are so high.”
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President Trump said tariffs will help rebuild US manufacturing. (Andrew Harnik / Getty Images / Getty Images)
Based on the analysis he saw, the 145% tariff on imports from China “is so high that it will not lead to new revenue. It will only prevent the products from entering the country as companies choose to pay tariffs to import goods and choose to reduce the amount of trade between the two countries.”
“What makes sense for US products, at least in the short to medium term, without substitutions, is that the products will be more rare and that will lead to higher prices,” he explained. “It’s fundamental economics. Creating rarity will increase demand for the remaining products and increase prices. That’s not a company’s decision at that point. It’s just a response to demand.”
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Taxes are taxes on imports paid by importers, which often pass higher costs to consumers at higher prices. (Getty Images/Mark Felix via Getty Images/Bloomberg)
Brzytwa added that some companies have struggled to find new places to manufacture their products to avoid relatively high tariff costs, and it is not economical to manufacture US goods at the same price level as American consumers are used to. That decision is complicated by “mutual” tariffs, which are temporarily at 10%, but rise to individual charges in most countries once the 90-day suspension ends.
“The US manufacturing environment does not support companies’ ability to manufacture highly innovative consumer technology products at affordable prices. These companies will go to places like Vietnam, Taiwan, Thailand, and more,” he explained. “However, if these mutual tariff threats still continue, all decisions they make will be undermined as tariffs could return at some point.”
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President Trump’s “mutual” tariffs have been suspended for 90 days in most countries, with a 10% baseline rate appearing. (Chip Somodevilla / Getty Images / Getty Images)
To provide more certainty to companies in the consumer technology industry, the CTA “advocates for a long-term, durable, binding and enforceable trade agreement between the United States and our allies.”
He pointed out that while the Trump administration’s trade talks are important, it is not clear what the White House has. Want to negotiate a larger trade agreement with Japan or strengthen the trade agreement with South Korea? He added that the new free trade agreement with Vietnam is “very dynamic and important to the US economy as Vietnam replaces China,” but the trade agreement with India would serve similar purposes.
“To ensure a successful negotiation, you need to create the right conditions and environment,” explained Brzytwa. “If these tariffs are just persisting, that’s the surprise of Damokul above the heads of these countries, and even though they negotiated an agreement with the administration, they may not be willing to negotiate if they know that tariffs will be hit later.”
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Smartphones were one of the electronic devices included in the temporary tariff exemptions for electronic products. (Seongjoon Cho/Bloomberg via Getty Images)
Brzytwa said the ripple effects of tariffs could create “contagion” that weakens other economies, and that the level of turbulence in the stock market is rising.
“The administration should keep in mind that hurting countries around the world through US policy choices is not in the greatest interest of the global economy,” he said.
Last week, the Trump administration showed it would create tariff exemptions for some consumer technology products, such as laptops and smartphones. Commerce Secretary Howard Lutnick later said exemptions were inherently short-term, but President Trump later said those tariffs would “just move to another bucket” and called reports on the exemption.
“The Trump administration’s decision to exclude certain consumer technology products from tariffs is to recognize these obligations in the long term that harm U.S. consumers and the economy. The CTA has been warning for over a year.”
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“Technology elimination is not a permanent solution. Unpredictability is to undermine long-term investment and growth. Higher production costs and limited skilled labor make domestic manufacturing of consumer technology challenging. Supporting innovation and competitiveness requires a smarter, more targeted trade strategy that works with allies to compete with China.”
