For centuries, ruling parties and politicians have imposed tariffs on inbound goods for a variety of reasons. The most common rationale is to try to create a “level playing field” to protect local industries from foreigners selling similar goods at a lower price. The belief is that doing this encourages domestic production and increases employment.
However, in many instances, protective tariffs carry a substantial downside. Adding the tariff to necessary items and components will increase the cost of certain necessary goods and services across the board.
In the past year, our government has imposed substantial import tariffs to many products, particularly products produced in China. Since these import duties are charged to the importing buyers and service companies who need them, the cost must be passed onto the consumers.
One notable increase has come in the category of electronic devices and components, particularly for IT service phone repair.
Current Tariff Categories Impacting Smartphone and Computer Repair
While some aspects of the negotiations seem to be on-again and off-again, one dominant element of the current United States trade dispute with China is president’s tariff assessments on a wide range of devices and components used in the U.S. as well as foreign-made phones and computers.
For example, the Harmonized Tariff Code (HTC) shows:
- Section 301 List 3 include lithium-ion batteries, laptop and game console parts, and Chromebook components
- Section 301 List 4A encompasses all phone parts except Samsung Service Packs
- Section 301 List 4B includes electronic items such as laptops, watches, phones, and more.
Schedule for Import Duty Implementation
- 30% tariff on Schedule 301 List 3 on October 15, 2019 (25% duty was already implemented on May 14)
- 15% tariff on Schedule 301 List 4A was implemented on September 1.
- 15% tariff on Schedule 301 List 4B to be implemented on December 12
For all U.S.-based phone repair company, replacing much-needed parts for phones and laptops will increase proportionately.
Impact of Import Duties in the Phone Repair Industry
The tariff increases on key electronic components do far more than increase the cost of repair. The cumulative tariffs can dramatically impact all parts of the economy. For example, if a company requires smartphone repairs, the added cost impacts their profitability by some margin. To prevent that negative impact, the company must raise its price for their goods or services. Additional costs impact their clients’ profitability, their prices go up also, and so on.
Eventually, costs everywhere will have risen. The consumer must consider cutting back on their expenditures because, in most cases, their wages have not increased to match the rising costs.
According to the Washington Post, JP Morgan Chase estimates that the current US-China trade battle could cost American consumers up to $1,000 per family per year. The expenditure required for businesses to redirect their supply chains and find alternative sources will be substantial.
CEG Phone Repair Services
Since 1989, CEG, located in Napa CA has been a premier phone repair provider and IT helpdesk support in the North Bay area including Napa Valley. Our trained professionals will do their best to ensure your smartphones are working properly and keep the cost of your repair as low as possible.
If you require tablet, computer, or phone repair, see us at CEG Group in Napa.