Increased tariffs likely to raise some IT hardware prices
With the speed of today’s national news cycle, it feels like more than a year since we first blogged about the possibility of tariffs raising the cost of IT hardware products.
It was about six months ago.
The most recent developments in the escalating trade dispute between the United States and China caused the IT supply chain – from OEMs to end users – to further speculate on the short- and long-term acquisition costs of IT hardware products. While it is almost universally believed that costs on products manufactured in and imported from China will rise with the new May 10 tariff percentage (25%, up from the 10% tariff announced in October), most suppliers cannot publicly commit to a specific number for any potential increases, a timeframe for when they might take effect, or group of technology products directly affected.
The Office of the United States Trade Representative has updated the types of goods shipped from China to which tariffs apply. For ease of navigating the 142-page document, the categories of many of the IT products affected fall within (and surrounding) the “HTS Subheadings” starting with the numbers 8443, 8471, 8523, 8525, 8528, 8543, and 8548. If you need to seek official confirmation, try searching those areas of the document.
What exactly determines a price increase, and how can SHI help?
The two determining factors in tariff-related cost increases are 1) what the product is and 2) where it is manufactured. The diversity of today’s global supply chain makes it difficult to pinpoint which products are built in qualifying countries and which OEMs are using affected components. But IT organizations must assume that the production costs of many major IT hardware OEMs will be impacted and passed down the line to consumers.
Every day, SHI works with our hardware partners in real time to understand how these changing market conditions affect the cost of doing business. The situation can always change based on revised government regulations, new trade agreements, or the business decision of a supplier. If you are currently undergoing a hardware refresh – or are budgeting for one in the near future – be sure to contact your SHI account team to receive the latest news, pricing, and availability of the technologies you are looking to acquire.